During the height of the pandemic, the phrase “essential workers” entered the popular lexicon when the Centers for Disease Control and Prevention defined the term as “those who conduct a range of operations and services in industries that are essential to ensure the continuity of critical functions in the U.S.,” according to its website. Among these jobs were construction workers, and while the acute threat of COVID-19 has receded, the number of unfilled positions in the industry has not.
“Since 2020, we’ve seen significant demand for workforce specific to the construction trades,” says Jennifer Mellor, chief innovation officer for the Greater Phoenix Chamber Foundation. “We’re estimating that there are 276,000 craft professionals needed between now and the end of 2024.”
Prior to the pandemic, the economic shock of the Great Recession hit Arizona hard, and it was one of the slowest states to recover. In the years since, Greater Phoenix has made a concerted effort to diversify its economy and be less reliant on housebuilding, retail and hospitality. That plan is paying off, as healthcare, financial services and manufacturing companies continue to set up shop in the Valley.
“All of these projects coming into the market can’t get implemented until the facilities are built, so we’ve had this greater need for commercial building,” Mellor says. “Because of our population growth, we’ve also seen a continued need for housing, whether that be single-family homes or multifamily housing.”
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Of the many announcements, TSMC’s $40 billion investment in North Phoenix has garnered international attention for the sheer scale of the project. Mellor notes that the facility in North Phoenix is expected to generate 21,000 construction jobs alone, constituting nearly 8% of construction job openings.
As Greater Phoenix continues to grow, so will the need for construction workers. Mellor explains that Build Your Future Arizona (BYFAZ), an initiative from the Greater Phoenix Chamber Foundation, seeks to spread awareness about these high paying construction careers and connect people to training opportunities in this in-demand field.
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Even though the boom of construction projects in recent years had put needs for construction labor in stark relief, Mike Bontrager, vice president and general manager for Alston Construction, notes that the industry started to see the mismatch between supply and demand for trades workers clearly about six years ago. The root of the issue, however, goes further back than that.
When the Great Recession ground new construction to a halt, Bontrager says that many workers decided to leave the profession altogether due to frustration around the cyclical nature of the industry. The workforce pipeline bringing new people into the industry has also slowed tremendously, with the average age of a craft worker being about 42 years old. The problem is compounded by the fact that many in the trades want to retire in their late 50s because of the physical nature of the job.
“It used to be that if you weren’t going to college, you either went into the military, a trade or some sort of manufacturing job,” he continues. “Today, there are several industries competing for people who decide they don’t want to go to college, and somewhere along the way, trade work got the reputation of being unsafe, dirty and too difficult.”
The push for every student to go to college also made it difficult to recruit for the trades, since many parents began to see postsecondary education as the only path to success. As a graduate himself, Bontrager says that college is a good path for many people, but tuition costs have swelled over the decades, altering the value proposition of attending.
“When I went to college, it was cheap. It cost about $1,200 a semester, and that included living in the dorm,” Bontrager says. “Today, you hear of students leaving school with $150,000 in loans.”
When students are unable to find jobs with high enough salaries to cover the cost of loans, or never finish the degree they borrowed money to attain, building a financially secure future become more difficult. A career in construction, however, provides good pay without having to go into debt and doesn’t preclude someone from attending college later.
“If we look back to 2020 before the pandemic, the median wage across the state was roughly $27 an hour, and construction was right in line with that,” Mellor explains. “This year the average wage was about $31 an hour, and as of September, the construction industry went to $34, so wage increases in this industry are far outpacing median wage increases.”
Without enough trade workers in the Valley, Mellor notes that the region’s attractiveness as a place businesses can locate could wane.
“When companies are choosing to relocate or expand in the market, they’re looking at a lot of different factors,” she concludes. “One is if we have the workforce for specific industries. Another is how long it takes for a project to go live, which relies on both the availability of land and the construction workforce. If we’re not competitive there, that will impact our ability to attract companies to our market.”
