Major Washington County projects struggle with labor shortage
Washington County needs 3,500 more skilled laborers this May for major infrastructure projects coming down the pipeline and already in the works, according to industry experts — but even if the area attracts enough workers, there is nowhere for them to live.
Local industry leaders are saying the struggle to find skilled laborers and attract more journey-level workers to the area is causing costs to increase exponentially on many major projects — including some that are taxpayer-funded.
Norm Eder, former president of the Westside Economic Alliance and partner with CFM Advocates, told the Tribune the Portland metro area has a current and future labor shortage, particularly in the skilled trades.
"The Willamette Water Supply Program, which is a $1.6 billion program that's underway and under construction right now to be finished in 2026, is spending something around $1 million a day," Eder said. "And its contractors are all having trouble finding the labor they need to build the pipeline, water intake plant and more."
According to Marlys Mock, communications supervisor with the Willamette Water Supply Program, the project is still on time to deliver a finished water system by 2026. Mock told the Tribune during the peak construction period in 2023, when 13 construction projects are expected to be active across Washington County, the water project's daily spending is expected to average $1.4 million.
Eder said costs are increasing for many Portland-area projects every day, in large part due to two main problems seen nationally and here in Oregon.
"One is labor. Labor costs are up. That's a good thing if you're getting a salary, but it's not just labor costs —it's shortage of labor, it's getting people on the job site. It's scarce and more expensive at the same time," Eder said. "The other is supply chain. If you're in business buying building materials, pipe, whatever you need to build something, everything is more expensive. People are finding their project budgets are going through the roof."
Eder said even developers who still want to build are having trouble finding skilled laborers to accomplish the projects.
Willy Myers, secretary and treasurer of the Columbia Pacific Building Trades Council, said a number of local projects are scheduled to ramp up this spring, including a computer chip manufacturing facility, data centers and the westside water supply project. Further transportation projects in the works include the Highway 217 realignment and expansion, the Highway 219 Newberg bypass, and other massive projects, Myers said.
"All of that is ramping up through May to a peak of about 3,500 or more workers than what we have currently working in the area," Myers said. "We'll be able to meet the demand by about 80%, and then about 20% we will have to recruit from outside the area. They don't call us journeymen and journeywomen for nothing — we do journey to where the work is right now."
Journeying into Portland
In Portland, home prices increased more than 15% in 2021 alone, and the market is expected to remain hot this summer, the Tribune previously reported. Rental vacancies continue to be in short supply around town, too.
"There's really no apartments or temporary housing options available for the workforce in Washington County," Myers said. "It's a really low inventory right now, so we are looking at hotel space, but we don't want to get in the way of the county's efforts to house homeless in their voucher system they're working on —but there may be enough for both. We're trying to coordinate that."
But Myers said finding suitable hotels continued to be a struggle due to the TriMet transit cuts, which have continued into 2022 in some parts of town due to the lack of drivers, which limited the areas suitable and accessible for jobsite workers.
Myers said the trades council is working with Washington County and Hillsboro to identify two properties that could serve 100 RVs each, possibly including the county fairgrounds because RV parking already was sought there and wouldn't need to be torn down after construction wraps in three or four years.
"Lots of times, construction workers travel with RVs, but there's actually no RV space either that's currently empty or vacant," Myers said. "So, we're certainly scrambling, trying to get ahead of this as quickly as possible — we like to effectually call it, we're leaving base camp and climbing Mount Hood."
If the labor demand is not met, the price of labor and construction could continue to increase as project timelines stretch further out, Myers said.
"We build projects and finish them. It's extremely important to have them on time in order to show any developers or future owners who want to build in Oregon that we can do a timely schedule and can meet their future construction needs," Myers said.
Otherwise, the Oregon area may not be so attractive to developers in the future, due to lack of skilled labor and the related expenses. Myers said if the area doesn't attract enough workers, it could affect projects' schedules.
"It's the same as not getting your product on time, to not have the workforce to be able to install the project," Myers said. "You have to have the workforce. We have to have suitable housing that meets the needs of the workers, whether they're outside the area or currently here — and we also need transit."
The compounded issues could be a contributing factor to developers choosing to build in other states, such as the Intel chip manufacturing facility announced in Ohio. Myers said Oregon may have fallen behind on incentives.
"Certainly, Ohio put quite a bit of money on the table with the enterprise zone. I think Ohio saw that coming better, quicker and put a better offer on the table," Myers said. "We do have a group put together to solve that for the future, and investors looking to invest in Oregon for chip manufacturers: There will be incentives there. We're still the headquarters for Intel when it comes to research and development. That's an enormous amount of work, especially with the amount of facilities they have here directly involved in research and development. That's an incredible amount of work for the building trades."
The job market
Andrew McGough, executive director of Worksystems Inc., told the Tribune these issues are a national phenomenon, compounded by the pandemic.
"We went from, I don't know how many tens of thousands of jobs we lost, and then we currently have more jobs now that we did pre-pandemic — or very close to it — so we have a heck of a roller-coaster ride that's definitely going to impact the workforce," McGough said.
And some of the former workforce is not returning. McGough said generally, workers 55 and older represent between 17-20% of the entire workforce — or used to. Also, access to child care has become a bigger burden for some workers who are parents.
"I think that's in part because unlike previous recessions or traditional recessions, the stock market didn't take a major hit, so people had savings and 401k accounts, and extended unemployment insurance put people in a position to say, I don't really need to go back to work, maybe it is time to retire — and they did," McGough said. "The other thing that is clear because of the pandemic is that women have left the labor force and have stayed disconnected or not returned to the labor market in much higher numbers than would've been predicted in the past. A lot of that is because women still are primary caregivers. If they have children in school, which is hit or miss going back to school, there's still a bit of precariousness."
The quit rate in Oregon is still high, and so is the job opening rate, the Tribune previously reported.
Myers said some companies such as semiconductor businesses that have real challenges finding entry-level technical workers are revisiting employee incentives.
"Companies like Intel, and semiconductors, are all rethinking what it takes to be a successful worker in that field because those are really good jobs — no college requirement, just aptitude and background," Myers said. "I think there's going to be a lot of reconsideration to what's expected and both in terms of certifications, experience and those kinds of things in terms of entry-level workers. Particularly for manufacturing, semiconductors and increasingly places like health care, they are rethinking how to get people in and then how to keep them."
McGough said the capacity to meet demand has slowed the supply chain across the globe, contributing to inflation.
"It's going to take some time to unravel all those challenges because we live in a global economy. As much as we may not like it, the reality is we're reliant on other countries, other circumstances to get the supplies we need, to get the work we need to get done," McGough said. "There are delays across the board. It's sort of chicken and egg: If you can't get the supplies right now, what makes you think if you changed your model you'd be able to get the supplies any faster?"
McGough said Worksystems has implemented a quality job initiative, intended to reduce churn by elevating the quality of jobs to attract and retain talent.
"We're going to try to work with local employers to come up with creative ways to implement and institute the sort of quality job characteristics that we hope will give them competitive advantage, but also our region a competitive advantage," McGough said. "We think the participation for skilled labor is only going to increase over the next several years, and we also think employers who really consider the wholistic experience for their employees are going to be much better off than employers who don't, to the extent we can help employers think about things — wages are always improving."
McGough said beyond wages, employers also can revisit access to benefits, developing career pathways and accommodating child care needs to give themselves a competitive advantage when hiring.
Myers told the Tribune a number of plumbing and pipe fitting apprentices are working toward becoming journeymen and journeywomen right now, as well as more than 1,000 electricians in the IBW program, among other crafts, which will help meet some of the increased demand for skilled labor.
"All of the crafts are seeing higher capacity, higher numbers than they've seen in a long time. We're training the new workforce. We're recruiting like crazy. There are job openings in every craft," Myers said. "There are a lot of people working on this. It's a great problem to have — having more work than workers. We do need to work collectively to solve it."
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