SBE News

GSBE Weekly Update 01/31/2018

Sacramento is poised for a building boom. Now it just needs construction workers

GSBE Golden State Builders ExchangesSome young people should forget about packing boxes at an Amazon warehouse or going to college, construction leaders say. Instead, they should join the building trades.

The Sacramento region needs more than 7,000 workers annually in construction and related fields in the next four years – many of whom can make $30 to $40 an hour without a four-year college degree, according to a new report by Valley Vision and the Centers of Excellence at Los Rios Community College District.

The six-county area is short of about 2,000 carpenters, 600 electricians, and 500 heavy equipment operators each year through 2021, the report says. Plumbers, painters, and masonry workers are in short supply, too.

Part of the need stems from growth in the housing and commercial construction sectors, including big projects such as the redevelopment of Sacramento’s historic downtown railyard. Aging and retiring workers are leaving an even larger gap.

Employers are having a tough time filling skilled positions, which generally require some advanced education along with on-the-job training. The shortage hurts the local economy and helps drive up housing prices by delaying development, researchers said.

Another major reason that the region is so “woefully undersupplied” in skilled construction workers, the report said, is that last decade’s recession and housing collapse drove the majority of tradespeople out of the industry or forced them to leave the state to find work.

Many who remained now commute to the Bay Area for its significantly higher wages, despite the two-hour drive each way.

“We’re recovering from a recession. We lost a lot of the workforce at that time. Now we’ve got projects ready to go and we have a (labor) pipeline shortage,” said Trish Kelly, managing director at Valley Vision. The nonprofit focuses on improving the quality of life in the Sacramento region, including through research.

Building activity tends to come in waves in Sacramento, with recessions severely limiting it and housing booms greatly increasing it.

“When you have boom and bust cycles, it drives people away,” Kelly said. “Obviously there’s a lot of thought about how we build a longer-term pipeline and smooth out the cycles.”

The labor shortage may actually help to extend the current recovery cycle by slowing the pace of construction, some experts said.

The rebuilding efforts in Napa and Sonoma counties, where forest fires destroyed thousands of homes and businesses last year, will likely pull away more local workers. Large-scale state infrastructure projects such as high-speed rail and highway upgrades could also draw on the local labor pool.

“One of our barriers to employment is that (Sacramento) wages haven’t gone up enough to the point where a person says, ‘It doesn’t make sense to commute,’ ” said Rick Larkey, executive director of the North State Building Industry Foundation, a group that’s been working with area high schools and builders to develop internship and training programs.

Part of the message to high school juniors and seniors – and to their parents – is that skilled trades are at least worth considering as alternatives to college and that a four-year degree isn’t the guarantee of success it used to be.

“We’ve been able to demonstrate to parents and students and educators the value of trades,” Larkey said.

It’s important that young people understand the pros and cons of construction careers, he said, including the ups and downs in construction that seem to occur on five- to seven-year cycles. There are also seasonal cycles, even in good years.

“You can expect that you will have a lot of free time in the winter months during a normal year,” Larkey said. Skilled tradespeople can often find work during California’s downturns if they’re willing to travel, he said.

“There’s some demand somewhere, usually, if you’re willing and able to move around,” he said.

The foundation and its construction partners expect to provide 100 internships to high school juniors this summer, hire 100 graduating seniors, and place 50 to 60 students in secondary training programs, he said. Other groups are on similar missions.

“It’s not just us,” he said. “We have people who are also out there trying to do the same thing.”

The Associated Builders and Contractors of Northern California, a trade group, is engaged in workforce development efforts including running apprenticeship programs.

Michele Daugherty, president of the north state’s ABC chapter, said a major takeaway from the Valley Vision report was that only 3 percent of the region’s construction workforce are women.

“It’s one of the startling statistics that keeps getting overshadowed,” Daugherty said. “With this desperation (for skilled workers), it really opens the opportunity to bring more women into the industry.”

Kelly, with Valley Vision, said adults changing careers, veterans and minorities could also benefit from the need for workers.

Right now, she said, “We’re missing opportunities for our own residents and leaking dollars out of the region.”

OSHA 300-A Posting Period (2/1 – 4/30)

All employers required to keep Form 300, the Injury and Illness Log, must post Form 300A, the annual summary of job-related injuries and illnesses, in a workplace common area by Feb. 1, 2018. This year’s summary must include the total number of job-related injuries and illnesses that occurred in 2017.

Form 300A reports a business’s total number of fatalities, missed workdays, job transfers or restrictions, and injuries and illnesses as recorded on Form 300. It also includes the number of employees and the hours they worked for the year. If there were no recordable injuries or illnesses, a company must still post the form, with zeroes on the appropriate lines.

ACA Forms Due to Employees (3/2) and IRS (2/28 or 4/2)
The IRS issued Notice 2018-06 on Dec. 22, 2017, which extended by 30 days the 2018 due date for distributing 2017 health coverage information forms 1095-C or 1095-B to employees, regarding the health care coverage offered to them.

The new deadline for supplying these forms to employees is March 2, 2018. This 30-day extension is automatic. Employers and providers don’t have to request it.

The due dates for filing 2017 information returns with the IRS were not extended, however. For 2018, the due dates to file information returns with the IRS remain Feb. 28 for paper filers or April 2 for electronic filers.