Strengthening the Foundation of the Building Trades

Alec J. Rexroat

March 1, 2007

Many meetings and seminars in the last year focused on the possibility of a significant labor shortage in the construction markets across the United States and Canada. The Construction Users Roundtable (CURT), American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) Building and Construction Trades Department (BCTD), International Association of Heat and Frost Insulators and Asbestos Workers (IAHFIAW), local unions in various markets, open shop contractors throughout the country, and numerous construction end users predict a labor shortage beginning sometime in 2007 and lasting until 2015. The numbers are staggering. The projected shortages are for tens of thousands of workers in every trade. This shortage, if it comes to fruition, will present scheduling and cost-escalation problems for companies interested in building new facilities. Union and open shop contractors in the Midwest Insulation Contractors Association (MICA) region have reported current and projected labor shortages, and National Insulation Association (NIA) members report projected labor shortages in every region.

How should the insulation industry address the problem of an impending labor shortage? Most agree that the industry needs to do a better job of selling its benefits. The story below helps demonstrate how this issue can be addressed on a personal level.

It was the summer of 1964. I was 18 years old, home from college, and ready to begin my first day on the job for the Luse-Stevenson Company, an NIA member company, at the Red Water Plant in the Joliet Arsenal at Joliet, Illinois. Early in the morning, a car pulled up in front of my parents’ house in Oak Park, Illinois. There were already four men in the vehicle, one of whom was my sponsor. I joined them with my bag lunch, white pants, and white shirt. (My sponsor had told me I had to wear “whites.”) After driving for an hour or so, we entered the plant through security and drove to a spot where a series of structures were being erected. All five of us walked to the change trailer, where I met the other insulation workers on this project.

“What in the world is insulation anyway?” I thought. “For that matter, what is Red Water Plant?”

We changed into our whites, and I was introduced to Ed Ryan, the larger-than-life man running the project for Luse-Stevenson. Ryan would direct me on this, my first project, and several others, imparting his knowledge of the industry to me for several years. I was told by my sponsor, Salty O’Rourke (yes, his name was Salty—I would also meet Spoons, Skin Head, Jiggs, and The Natural, among others), to do what I was told and keep my mouth shut. Salty warned me that I would get some teasing but to just go along.

The workers were placing white blocks of powdery stuff on the pipes and vessel walls, bottoms, and tops. They then hammered at the stainless steel bands until the white stuff was pulled tight. When this procedure was completed, they covered the surface with chicken wire and finished the wire with cement. That was my job—to make sure the men always had plenty of cement, or blue mud (as they called it). The final finish on the system was 8-ounce canvas. Ryan asked me once if I knew why we were insulating these systems. I told him I had no idea, so he made sure I understood.

They pulled many practical jokes on me. I spent 4 hours that first day searching the jobsite for a canvas stretcher. Finally, a fitter took pity on me and handed me what they called a come-along. The men had a good laugh at my expense.

I went home that first evening tired but excited. I told my mother that this was the best job. These guys laughed, played tricks on each other and me, and worked hard. And the best part was, we were getting paid for this kind of fun. They were making twice the money I was, but I was in hog heaven with my $3.25-per-hour wages. My mother’s only response was, “You’re going back to school.” I spent every day that summer working for Ryan and learning about the insulation industry.

The hundreds of workers on the Red Water project were like a family. I had never seen boilermakers, ironworkers, pipe fitters, bricklayers, or electricians in those numbers. And I certainly had never seen insulators. Salty was my neighbor in Oak Park, but I never knew what he did for a living and never really cared until he got me that job. I did not know at the time that he had to go to bat for me with Mr. Mulligan at the Local 17 office of the IAHFIAW. The men knew each other well and talked as if they were brothers. I wanted to be part of this family.

I went to college and have worked as an insulator, contractor owner, and association executive. My career would have been entirely different had I not been exposed to the building trades. Salty, Ed Ryan, Mr. Mulligan, and others gave me the opportunity to experience an industry I would never have seen if not for that summer. Now, some 40 years later, I get to share my experiences in the insulation industry with a new generation.

Why is that story important? It started a love affair with the insulation industry, an industry within the building trades. Others have had similar experiences. Members of the industry must sell the benefits of the building trades to future generations. Every kid should be lucky enough to love what he or she is doing. Many young people do not even know that the insulation industry exists. No one has told them that they can be part of the industry that ensures the power used by our society is available. No one has told them they can be part of the industry that ensures that we have enough fuel to get to work every day. No one told me that I could be part of the industry that would house the office workers in buildings like the Sears Tower in Chicago. Many high schools are primarily college prep schools. Sure, they may teach woodworking and small-engine repair, but what about the building trades? Most students are never exposed to these trades.

Many local associations have “school-to-work” programs that are helping to get the word out. The task of educating children and school counselors is enormous, but it must be done. There is an obvious need for intense programs at every level to shine a light on the building trades in general and the insulation industry specifically. The same problems exist for all sectors of the market. But what if every high school and college student were exposed to this industry? Some would come to the union side and some to the open shop. All boats will float when the industry successfully spreads the word.

The Southeast Manpower Tripartite Alliance (SEMTA) performed a Critical Needs Assessment for the Southeast sector of the United States. This assessment is arguably the best research done on the labor requirements in any market in the United States. Members of the assessment committee included Alan Katz from Florida Power and Light (FPL), Greg Sizemore from CURT, Carl Ferguson from Boiler Makers Local 199, Rudon Taylor from the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada (UANET), and Eddie Clayton and Ron Campbell from Southern Company. The objectives of the committee were to determine the magnitude of the craft labor supply and demand in the market, evaluate manpower shortfalls and needs, identify craft-specific shortfalls and severity, and develop action plans. It is estimated that approximately 30 percent of the trade workforce is over age 55. Surprisingly, only about 20 percent is 25 and younger. This means the market will lose more people in the next few years than it will gain. In addition, according to the assessment, insulators fall into the critical demand category for the future, along with boilermakers and pipe fitters. In fact, those three trades are already in critical demand. The assessment recognized a trade growth rate between 45 percent and 85 percent for painters, ironworkers, pipe fitters, and insulators. The demand peak will occur between 2009 and 2014.

The SEMTA study is the best work done to date on this subject, but the Southeast sector is not the only area of the country experiencing labor shortages. The Gulf Coast has a significant labor shortage for most, if not all, trades, due to the catastrophic effects of Hurricane Katrina. Larry Nelles, an NIA member and division vice president for the Brock Group, notes that his company’s market has just begun to feel the effects of Katrina. He predicts a huge surge in labor requirements in all trades in the near future. Refinery construction and expansion, as well as power-generating facilities in other areas of the United States, are placing a burden on local labor supplies. One contractor in the Chicago market says he will need 150 additional insulators in the next 16 months on one project alone. The design sector of the industry also is having trouble finding qualified engineers to design and draw U.S. facilities.

The United States has not built a new refinery or power-generating facility for decades. Now the need has been identified, and new facilities are either on the drawing boards or are already being built. This development—along with the strong, expanding economy in which many manufacturers are planning expansion of existing facilities or building new facilities—and the growth of commercial construction in many major metropolitan areas, is priming the market for a construction boom and an associated labor shortage. It was reported at a meeting with the BCTD that as many as 500 boilermakers are needed in the Wisconsin market, for example. In a letter to the general presidents of the Federation of Organized Trades and Labor Unions and the leadership of the AFL-CIO BCTD, Greg Sizemore, the executive vice president of CURT, emphasized the importance of active leadership in addressing the imminent workforce shortage in the industry. The letter was presented to the general presidents at the CURT Tripartite Initiative meeting that was held in Chicago on October 31, 2006. Sizemore suggested that the time is critical to pursue aggressive recruiting and innovative training to meet the crisis. “More craft and management personnel are needed by owners and contractors,” the letter explained. “[The owners] believe that aggressive action at the local level is absolutely critical for success in meeting the craft demands.” The local level is where new workers are recruited and trained. The general presidents received, understand, and are embracing the message.

The letter also suggested recruiting displaced workers from other industries, sharing resources and training assets among the trades, using training facilities during the day, and re-examining the classification of workers. It also recommended that the trades work closely with CURT to evaluate the demand and supply of craft labor in each geographical area.

At the grassroots level, owners are urging all parties to offer leadership by example. Employees should be encouraged to arrive on time and ready to work, with a “can-do”
attitude. Worker productivity and productive use of jobsite resources are keys to success.
The labor shortages will require some projects to be placed on hold while other facilities are being built. The competition for labor inevitably will raise the cost of building projects across the country. Those willing to pay higher costs will succeed in getting their projects completed, while others will have to wait for a slowdown.

The movement of workers between geographical areas will alleviate some of the problems; but if all areas of the country are facing labor shortages, this will be just a temporary solution. U.S. companies cannot count on the Canadian workforce because there is a significant shortage of qualified personnel there, too. One suggestion is to offer apprentice applicants the opportunity to move to another location for apprentice and on-the-job training. Another suggestion is to begin a program where each person involved in the construction trades is responsible for introducing one person to the building trades as a career. With the tens of thousands of people in the industry, a 5-percent return would make a difference. Bill McHugh, executive director of the Fire Stop Contractors International Association and the Chicago Roofing Contractors Association, suggests thinking outside the box. Perhaps the calendar time for apprentice training could be shortened, for example, and classes could be compressed to a 1- or 2-year, college-type curriculum, with students attending classes every day. This system would dramatically reduce the time required to move to journeyman status.

The AFL-CIO BCTD, under the direction of Ed Sullivan and Sean McGarvey, is moving to help all building trades fill this void. A BCTD advertising campaign is being studied. The group is discussing the possibility of bringing back retirees to help alleviate the labor shortage. Accelerating apprenticeship training also is being considered. The Helmets to Hard Hats program has been very successful in many parts of the country in bringing in highly trained, disciplined workers. The BCTD meets regularly with the executive directors of all building-trade organizations to explore more ways to ensure that qualified workers are available when they are needed.

Training people to become qualified tradespeople is a difficult task that cannot be done overnight. At the very least, people must receive proper safety training. Owners in most plants require random drug testing. Prospective workers also must have some exposure to the type of work they will be doing and some understanding of why the task is an integral part of the construction process. While on-the-job training is the way apprentices learn most of their trade, apprentice training must be part of the equation. Owners expect and pay for knowledgeable workers. The construction industry cannot just pick people off the street to fill the void in the labor market.

If the prospective labor shortage is expected to occur 4 years from now, the industry must begin working to satisfy labor needs today. Both open shop and union contractors know, however, that you cannot train people today in the hope that you will have work for them in the future. People expect to be able to work while they are being trained. If the market today cannot sustain the number of trainees that will be required in the future, contractors will have a difficult time finding people to work as trainees. For example, if a local market can sustain 1,000 workers today and is expected to use 1,400 in 2010, the 400 additional workers need to begin training now. The question is how to keep the extra 400 new workers employed until 2010. This becomes the big problem for local business managers, whose job is to keep everyone working.

Many local unions in the insulation industry are moving to rectify these problems. For example, Local 17 (in Chicago) is looking forward to make sure there is sufficient qualified labor for the future, and embarking on a public relations campaign to place insulation on radar screens. Local 19 in Milwaukee is also being proactive, as is Local 34 in Minneapolis. Solutions for such a national problem will not be easy. As noted above, a career in the building trades is not in the minds of most high school counselors; yet in most areas of the country, apprenticeship programs beg for qualified applicants. A career in the building trades must be sold for the wonderful lifestyle it provides. Young people have an opportunity to work with dignity building America, earn a nice living with health and retirement benefits, and feel a sense of pride in their accomplishments. It can also be fun. What a concept: Go to work, earn good money, provide for your family, and have fun! This is the way a career in the trades should be sold to young people who are looking for a solid career path.

It is incumbent on all parties involved (owners, contractors, and labor—both union and open shop) to participate in programs that show the building trades in the light they deserve. Successful industry insiders must attend high school and college job fairs, and help educate high school guidance counselors so that the building trades receive appropriate attention.

It is clear that this is a critical juncture in the history of the insulation industry. It is a great opportunity to offer the nation’s young people a bright future that they otherwise might not hear about, and it is a great way to grow the industry.