As El Paso booms, construction crews in short supply.
El Paso Inc.
El Paso’s construction boom, which is building everything from new highways to schools, has created an acute shortage of workers that has local construction firms wondering:Who is going to build it all?
“There are just not enough available workers to do the work,” says Angelica Rosales, JAR Construction’s business development director.
The El Paso-based construction company employs about 120 people. It’s one of several local firms that say they have struggled to find skilled workers even as they have raised wages and sweetened benefits.
The shortage of skilled labor in the construction industry is not unique to El Paso, but is being felt sharply here as a slew of bond and road projects move forward.
Nationwide, almost two-thirds of construction firms said they are having trouble finding workers in a recent survey by the Associated General Contractors of America.
“El Paso is in a pretty good spot right now with all of the construction, but by the same token, the labor force is rapidly becoming an issue,” says John Goodrich with El Paso-based Jordan Foster Construction, one of the city’s largest general contractors.
In El Paso, Jordan Foster has openings for at least 10 skilled workers, according to Goodrich, president of the company’s infrastructure and concrete group. It’s particularly hard finding workers to fill management positions.
“I could hire three good superintendents on the spot and probably three more foremen,” he says.
JAR Construction, which celebrates its 60th anniversary this year, has advertised two positions, superintendent and project manager, for nearly six months and has been unable to fill the jobs, according to Rosales.
Meanwhile, the Texas Department of Transportation is drawing up plans for another $1 billion worth of road improvements. And the El Paso Independent School District is moving forward on the projects contained in the $668.7-million bond passed by voters in November. The bond – the largest ever proposed in the county – will rebuild and renovate schools in the district.
“We are confident with the models, projections and schedule we have in place that we will be okay. Having said that, are there risks involved? Absolutely. Any construction project has risks involved,” says Carlos Gallinar, EPISD’s executive director for planning and innovative schools construction.
At the same time, the city is rolling out the 2012 quality of life bond projects, work continues on a new streetcar route and Downtown revitalization continues. Then there are all the new shopping centers being built by local retail developers a record pace.
Richard Ortiz, CEO of El Paso-based ZTEX Construction, says the city’s growth has been really good for their business, which has grown from 100 employees in 2014 to 300 employees today. To accomplish that growth they had to start offering wages that were competitive with firms in Dallas and Austin. Still, it’s hard to find qualified workers – especially those who have years of experience.
“We’re always looking for employees,” Ortiz says.
It’s not the first time skilled labor has been in short supply in El Paso, says Ortiz, who has worked in the construction industry for 50 years. The skilled labor pool was squeezed 10 years ago when the $6-billion expansion of Fort Bliss began. It was squeezed again by the shale oil boom, as workers were lured to oil boomtowns east of El Paso by oversized paychecks.
“El Paso has been like a bank that a lot of other places draw people from,” Ortiz says.
Since oil prices plunged more than a year ago, local firms have been trying to bring back some of those workers. But it’s hard, they say.
“Even though the oil fields are a bit slower now, there are some that got used to that big wage,” Goodrich says.
In addition, executives say that not enough young people are going into traditional trades like construction, and they can’t find younger workers to replace the baby boomers who are retiring. That has created a workforce gap.
“Over the years, the construction industry has done a bad job of inducing young people to take up the trade,” Goodrich says.
What’s the draw? “From a construction standpoint it all boils down to this for me: You can put your hands on it,” he says. “Building things is gratifying. It’s something I can show to my kids and the rest of my family.”
Since younger workers don’t have the experience that older workers do, Jordan Foster invests a lot into employee training these days. And over the past three years, wages for some jobs have gone up by as much as 30 percent, Goodrich says.
One local construction company said they have a superintendent who makes $75,000 a year. The position requires years of experience and skills but not a college degree.
JAR Construction began offering a new perk for some positions last year – student loan repayment. They also started offering health insurance benefits for drivers.
“It’s a great industry,” Rosales says. “You can make a living wage.”
Construction industry payrolls are at all-time highs in El Paso County.
Average weekly wages in the construction sector increased from about $700 in the first six months of 2015 to about $750 in the first six months of 2016 – a 7 percent increase, according to Adam Walke, an economist at the University of Texas at El Paso.
Wages were driven up in part by a boom in home, office, retail and apartment construction in 2015.
“Wages in the construction sector will most likely continue to increase, but at a slower pace than last year,” Walke says.
Joyce Wilson, CEO of Workforce Solutions Borderplex, says the agency works with local companies to create apprenticeship programs and has held hiring fairs that target the construction industry.
Workforce Solutions recently received a YouthBuild grant from the U.S. Department of Labor.
The program helps young people who left school early to complete high school and get jobs in trades such as construction.
“Now in particular, with all bonds that have passed at various school districts, the city and all the TxDOT road projects, there is a lot of demand for skilled workers,” Wilson says.
Goodrich’s prediction for the future? “More fighting for skilled labor,” he says.