Readers of this blog are familiar with the Starkman Approved theory, which holds that those who publicly profess the loftiest ethics standards and the deepest concerns for racism and diversity invariably are exposed as frauds. I’ve called out American Express and Centene for making a mockery of the uncompromising values they claim to hold most dear (see here), and I’ve called out CEOs Tina Freese Decker and Jennifer Tejada for evoking the memory of Dr. Martin Luther King Jr. when they clearly knew little about the civil rights leader and what he stood for (see second item here).
Transportation Secretary Pete Buttigieg last week provided further validation of the Starkman Approved theory.
Regardless of one’s political affiliation, it’s a wonder how anyone couldn’t be alarmed by Buttigieg’s reckless flaunting of his ignorance, particularly since the guy is supposedly one of the Biden Administration’s bright lights. I’m talking about Buttigieg’s address to the National Association of Counties last week during which he indicted America’s construction industry, implying there was some sort of racial bias in their hiring practices.
“We have heard way too many stories from generations past of infrastructure where you got a neighborhood, often a neighborhood of color, that finally sees the project come to them, but everyone in the hard hats on that project, doing the good paying jobs, don’t look like they came from anywhere near the neighborhood,” Buttigieg said.
The story got quite a bit of coverage in the conservative media, and comedian podcaster Joe Rogan also blasted Buttigieg for his comment. The outrage was primarily driven by Buttigieg’s scant concern for residents in East Palestine, OH, whose drinking water was possibly contaminated and their air polluted because of a train derailment that resulted in an explosion and the release of toxic chemicals into the environment.
Buttigieg’s diversity comment was more outrageous than Rogan and other commentators appreciated, as it betrayed Buttigieg knows nothing about the construction industry and the serious labor issues facing it. Indeed, the issues are so severe they could derail President Biden’s ambitious infrastructure initiatives. Buttigieg himself earlier this month announced an $800 million road improvement initiative.
First, let’s look at some statistics. Blacks currently comprise 11 percent of the U.S. construction workforce, while accounting for 14 percent of the U.S population. Hispanics comprise 28 percent of the construction workforce and 19 percent of the total population. Two percent of America’s construction workforce is LBGT, while 7% of Americans identify as lesbian, gay, bisexual, transgender, or something other than straight or heterosexual.
The construction industry would gladly increase Black and any other representation in their workforce. In fact, given the severe labor shortage the industry is undergoing, they’d welcome anyone with a pulse.
The Association of Builders and Contractors last week warned that their industry will need to attract an estimated 546,000 additional workers on top of the normal pace of hiring in 2023 to meet labor demands.
“Despite sharp increases in interest rates over the past year, the shortage of construction workers will not disappear in the near future,” said ABC Chief Economist Anirban Basu. “First, while single-family home building activity has moderated, many contractors continue to experience substantial demand from a growing number of mega-projects associated with chip manufacturing plants, clean energy facilities and infrastructure. Second, too few younger workers are entering the skilled trades, meaning this is not only a construction labor shortage but also a skills shortage.
The Associated General Contractors of America last September also warned of a critical labor shortage.
“Construction workforce shortages are severe and having a significant impact on construction firms of all types, all sizes and all labor arrangements” said Ken Simonson, the AGCA’s chief economist. “These workforce shortages are compounding the challenges firms are having with supply chain disruptions that are inflating the cost of construction materials and making delivery schedules and product availability uncertain.”
The AGCA said the labor shortage was so severe that it’s undermining the industry’s ability to complete projects on schedule and “threatening the success of new federal investments in infrastructure and manufacturing.”
The construction labor shortage is impacting all regions of the country, including Traverse City, MI, Buttigieg’s official residence. This headline from The Ticker, which covers the Traverse City region, deftly captures a critical issue in Buttigieg’s adopted hometown, whose population incidentally is overwhelmingly white.
If Buttigieg wants to learn from a fellow Michigander about another critical issue facing the U.S. construction industry he’d be wise to contact DeShon Leek, a lifelong Lansing resident and member of UA Local 333 Plumbers and Pipefitters, where he has served as a union steward for the past seven years. Leek was among the construction labor representatives quoted in this news release issued by Michigan’s Department of Labor and Economic Opportunity to raise awareness about suicide prevention in the construction industry.
The construction industry has one of the highest rates of suicides among all occupations — four times higher than the general population. In 2019, Michigan’s construction and extraction occupation suicide rate was 75.4 per 100,000.
The construction industry is dominated by mom-and pop businesses who are the subcontractors that giant construction firms farm out their work to. The fragmentation has caused the construction industry to severely lag in technological efficiencies, with some business still relying on paper-based tracking of work and change orders. The Flintstones-aged reliance often leads to errors, some serious enough to imperil a business.
I first wrote about this issue in August 2020 profiling Khalid David, a Black entrepreneur who worked in construction, as did his father who was a union steward. Khalid developed an app that would allow subcontractors to accurately track the myriad change work orders they are required to make on projects. Although a major construction firm was already using his app, he initially struggled trying to raise a measly $500,000 from venture capital firms.
Khalid, who has an MBA from MIT and a civil engineering degree from Columbia, eventually raised his needed funding from a venture capital firm formed by the tennis star Serena Williams to combat systemic VC bias. Less than two percent of VC funding goes to Black entrepreneurs. If Buttigieg wants to focus on racial disparities, he should set his sights on Silicon Valley. He might also want to subscribe to this blog, as I’ve previously written about Williams’ fund.
Buttigieg doesn’t need to commission a costly study from his former McKinsey colleagues to understand what precipitated the construction industry’s labor ills. Dan Goodchild, director of the technical academic area at Northwestern Michigan College and a licensed electrician, told the Ticker that some 50 percent of the existing construction trades workforce is nearing retirement age and is likely to exit the industry within the next 5-10 years.
Goodchild says U.S. schools have done a poor job priming a replacement pipeline.
“Growing up, I remember I had a shop class in fifth or sixth grade,” Goodchild said. “Then it was probably in the ‘80s or so that those classes started fading away. Now, we’ve got 20-30 years where trades have not even been mentioned to lots of kids.”
Seems to me, subsidizing construction training and apprenticeships would be a far better use of taxpayer funds than giving $7,500 tax breaks to rich people to buy electric cars. Given that construction jobs nationally pay on average $49,000 a year and $54,000 in California, I’d welcome an economist study calculating the impact of 546,000 additional workers earning these wages on the U.S. economy.
SalaryExpert estimates that construction worker wages will increase more than 20 percent over the next five years. Unlike GM and Ford, the U.S. construction industry can’t offshore jobs.
Tennessee Gov. Bill Lee understands the importance of vocational training and aligning programs to meet the labor needs of employers increasingly relocating to his state. According to this Bloomberg story, Lee personally met with Ford executives to review the needed “curriculum” for the skills required for the high-paying jobs at BlueOval City.
The curriculum is being incorporated into lesson plans at Tennessee’s technical colleges and high schools, many of which are in communities of color. Tennessee educators are even counseling eighth graders on what to study to land a job with Ford.
In speaking at a conference of the National Association of Counties, which represents U.S. County governments, Buttigieg had an opportunity to promote the urgent need of vocational training required to build and modernize America’s infrastructure and housing. Instead, he waxed on about a diversity issue that doesn’t exist, and he can nonetheless improve.
Buttigieg can count on his entrenched media enablers to provide him cover and distract from his incompetency. In a story about mounting criticisms about Buttigieg’s failure to address the crisis in East Palestine, the New York Times said, “Right-wing commentators have been particularly critical, using the crisis to sow distrust about government agencies and suggest the damage could be irreparable.”
I’d encourage the mayor of East Palestine to bottle some of his city’s tap water and ship it to the newsroom of the New York Times and other entrenched media outfits. I’ll bet “left-wing” commentators wouldn’t touch the stuff.
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