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As construction booms in Madison, skilled workers are in short supply

Posted on June 24, 2013
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Wisconsin may be lagging the rest of the country in job creation and Madison is falling behind peer cities in economic growth, but the economy here is great for union electricians.

Dave Boetcher, business agent for the International Brotherhood of Electrical Workers Local 159, says the 900 members of his Madison-based local are at “150 percent employment.” No joke.

“All of our local members are working and we’ve had to bring in members from other locals and other states to man the work,” he says. There is so much work, he says, that the local has been calling up members from other union locals elsewhere – as far away as Chicago – to offer them jobs on projects around Madison.

By far the biggest construction project is the expansion at Epic Systems in Verona. On that campus alone, 450 electricians are earning a paycheck, says Boetcher.

The effects of Epic’s rapid expansion are evident far outside of its sprawling suburban campus. The company’s constant hiring is driving a mini real estate boom throughout Madison, as developers scramble to build apartments to house the young, middle-class workers moving here in droves.

“There’s like 1,600 apAs construction booms in Madison, skilled workers are in short supply artment units coming downtown in July and August,” says Harry Sulzer, an inspection supervisor for the city of Madison. “Some of that is driven by our friends in Verona. A lot of those professionals are moving to downtown Madison.”

The housing boom reflects a welcome reality after the long recession: There are nearly no vacant apartments in downtown Madison. And of the existing units, many are old and run-down; they’re barely suitable for penniless UW students, let alone young professionals with disposable income.

More houses are going up too. Andrew Disch, a spokesman for the Madison Area Builders Association, says 403 permits for new single-family homes have been issued in the first five months of 2013, compared to 307 during the same period last year.

For many people who are thinking of setting up permanently in Madison, there’s never been a better time to stop renting and start buying. While landlords continue to raise rents in response to the saturated market, home prices remain fairly low and interest rates are quite favorable.

“I think we’ve finally reached a point in the consumer’s mind – (while) they may not have a real high level of confidence in the economy, they’ve come back to their strong belief and confidence in housing,” says Kevin King, president of the Realtors Association of South Central Wisconsin.

This is all great news for workers in the construction trades – the sector that was devastated by the housing bust in 2008. Or, it’s great news for those who remain.

“We’ve had a number of calls from our contractors looking for employees,” says Stephen Stone, director of business development for the Associated Builders & Contractors of Wisconsin, a group of non-union contractors. “They’ve called back their employees they’d laid off and now they’re looking to expand.”

The problem is, many workers became so discouraged during the recession – or so desperate for money – that they stopped looking for construction work.

“They’re doing something else now,” Stone says. “And I don’t think those people are going to come back to our industry – they’re not going to leave that other employment until we as an industry can prove that the market is back.”

That’s why John Stephany, who teaches construction and remodeling at Madison College, says the trades are a great opportunity for young people looking to make a good living. Almost all of the 24 students who recently graduated from his program found jobs immediately after finishing school. And unlike many college graduates, they can expect pay raises in the next year.

“I think the average wage for graduates has increased $2 in the past year,” says Stephany. “The average starting wage has gone from $10 to $12 an hour to $14 to $17 an hour.”

Keep in mind, that’s just the starting wage. Experienced trades workers make far more than that. A union electrician in Madison who has completed a five-year apprenticeship earns a base wage of $33.45 an hour (roughly $70,000 a year if working full time) plus benefits.

And yet, as the economy slowly recovers, large swaths of young workers who are struggling to find good jobs aren’t considering the trades. The message across the country, from guidance counselors to the White House, has emphasized the importance of college in the 21st century.

Indeed, as manufacturing jobs that once offered middle-class wages have been shipped overseas or made obsolete by mechanization, many parents likely see college as the only responsible path for their kids to take.

But unlike manufacturing, the trades aren’t going away anytime soon.

“These are jobs that can’t be outsourced,” says Stephany.

And unlike traditional college, where the typical student accrues thousands of dollars of debt, a trades apprentice makes money while attending school to learn the trade. To become a union electrician, for instance, one undergoes five years of on-site and classroom training — all the while getting paid.

Women, who increasingly dominate college campuses and are surpassing men in many white-collar professions, remain greatly underrepresented in the trades. At Madison College, in fact, there is a program, Tools for Tomorrow: Women in Trades and Technology, designed specifically to offer women a glimpse into a potentially profitable field.

The head of the program, Nancy Nikkoul, says the percentage of women in the trades has hardly budged in the past two decades. Currently, she says, only 2.3 percent of construction apprentices in Wisconsin are women.

Two decades ago, Sandy Thistle, who now is an instructor in the program, was one of the few women who went into construction. After dropping out of UW, where she had been studying to enter the female-dominated field of nursing, she decided to give carpentry a shot.

“I was good at math, I was kind of athletic, I wanted to work outside and do something physical,” she recalls.

There were also practical considerations: “I wanted to be able to have a decent living and union carpentry paid very well.”

Specifically, being in a union — where pay for all workers is negotiated in a contract — ensured that she would be paid as well as her male peers. “We all know that if (employers) could pay me less because I’m a woman they would,” she adds.

So how much longer is this building boom going to last?

Much of it is being driven by several major projects – notably Epic – and some of it likely represents homeowners and businesses making up for the break they took from building during the recession.

“Four more years,” predicts Awad Hanna, a UW professor of civil engineering who studies the construction labor market. “I can see at least four more years of this tight (construction) labor market and then construction will be tied to the economy.”

From a construction worker’s perspective, another four years of steady employment is welcome, but those who endured the Great Recession – when the national unemployment rate in construction was at one point as high as 27 percent – may wonder if it’s only a matter of time before the next downturn occurs.

Mayor Paul Soglin, however, believes that the building frenzy represents a long-term shift toward economic development in Madison.

“The volume of construction here in Madison that’s under way or will be under way shortly is a significant increase which outperforms what you would expect to see in this

From a construction worker’s perspective, another four years of steady employment is welcome, but those who endured the Great Recessio

recovery,” he says.

He attributes the building bonanza in part to a message he believes his administration has sent to developers that their projects are welcome.

Zach Brandon, president of the Greater Madison Chamber of Commerce, says Soglin deserves credit for his development efforts, but argues that the move toward a development-friendly city hall began with Soglin’s predecessor, former Mayor Dave Cieslewicz.

“I think it’s certainly true that over the last few years there’s been an epiphany that development isn’t going to happen on its own,” he says.

While the jobs provided by Epic and building projects on the UW campus are great, Brandon says the most encouraging signs are the cranes on smaller, private-sector sites.

“It’s not just Epic, it’s not a single point in time,” he says. “It’s becoming a trend line.” ?

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