Opinion | Labor shortages demonstrate need for investment in workers

At a time of historic demand for construction services — including infrastructure modernization, utility system upgrades, domestic manufacturing facilities and housing supply — the construction industry is grappling with an acute skilled labor shortage. Many experts believe that federal policy changes could exacerbate the problem.

When it comes to creating a sufficiently skilled construction labor supply pipeline, the data have consistently argued for more investment in job quality and workforce development.

Registered apprenticeships have a long history of training workers and attaching them to in-demand construction careers by offering participants the chance to “earn while they learn,” free of college debt. And while recent research by the Midwest Economic Policy Institute and the Project for Middle Class Renewal at the University of Illinois at Urbana-Champaign shows that Wisconsin is training far more apprentices than eight years ago, it also shows the state has lagged many of its Midwest neighbors.

The reasons why are important to understand.

There are essentially two types of registered apprenticeship programs in construction. In joint labor-management programs, employers and trade unions partner together to administer programs, and finance the system by negotiating a “cents per hour” contribution into the program for every hour that a union tradesperson works.

In the non-union, or “employer only,” model, curriculum and standards are determined unilaterally by employers or employer associations. Funding is voluntary, which creates incentives for employers to forgo longer-term workforce investments in order to win short-term work where the lowest bid wins.

Recent research suggests this is precisely what is happening in Wisconsin today, making the state’s construction training system appear upside down. The nonunion sector, which accounts for 78% of the industry workforce statewide, trains only 23% of the state’s construction apprentices. Unions represent 22% of the industry but produce 77% of apprentices, including nearly nine in 10 Black and female apprentices and eight in 10 military veterans. The data also reveal that joint program investments account for 96% of all private investment in registered construction apprenticeships statewide.

Indeed, these joint apprenticeship programs are delivering superior graduation rates and job quality outcomes. Participants complete their training at the same rate (63%) as bachelor’s degree enrollees in the Universities of Wisconsin, which is 9% higher than the completion rate in employer-only (nonunion) programs (54%). A union journeyworker also earns a 24% higher wage than the typical UW graduate, and 41% more than a nonunion construction worker.

All of which brings us back to the question of why Wisconsin is lagging its Midwest neighbors of Illinois, Minnesota and Ohio in apprenticeship growth by as much as 14%.

The data indicate that a couple of significant recent state labor policy changes have had negative impacts on the state’s registered apprenticeship system.

In 2015, state lawmakers passed a so-called “right-to-work” law, or a government regulation that forces unions to represent non-members for free. This eroded the resources unions would otherwise have had available to organize and bargain for investments in training or job quality. \

In 2017, the Legislature went a step further, repealing the state’s prevailing wage laws. These laws had established local-market minimum wages and “cents per hour” training investments — for both union and nonunion contractors — on different types of publicly funded construction work for over 80 years. Notably, none of Wisconsin’s comparable Midwest neighbors have these policy frameworks in place, which research has linked to weaker apprenticeship systems and lower construction job quality.

Ultimately, to combat Wisconsin’s skilled labor shortage in construction, the data argue for a reconsideration of public policies that promote investment in registered apprenticeship training.

For example, restoring collective bargaining rights for more workers would expand the labor-management partnerships that already train most of the state’s apprentices, and research shows it would improve the safety, labor supply and workforce productivity outcomes needed to make projects more cost-effective.

Similarly, reinstating Wisconsin’s prevailing wage law would ensure that all firms working on publicly funded construction projects — regardless of union status — are investing in registered apprenticeship programs. Both would mean more training opportunities for workers and less uncertainty for employers when it comes to the growing demand for skilled construction labor.

Indeed, they would not only help construction firms find the workers they need, but also help a new generation of Wisconsin workers gain access to family-sustaining careers in the skilled trades.