Most of the current debate about an Alaska North Slope gas line revolves around the economics of the line, what route it will take and who will build it. But a massive construction project of this type will require an army of workers. And that’s in addition to the workforce that might be required for other major projects such as a Southcentral gas spur line, new oil and gas field developments, a coal gasification plant at Nikiski and various mining developments.
Where are the skilled workers required for these huge projects going to come from?
Representatives of various Alaska entities involved in workforce development met at an Anchorage Economic Development Corp. conference in October to establish a common understanding of a looming Alaska workforce crisis. A prime purpose of the conference was to develop recommendations for the next Alaska governor and Legislature on how to address the future needs for skilled Alaska personnel.
“It doesn’t matter how many employers or projects we have, if we don’t have the prepared, available and vibrant workforce, Alaska’s going to be in trouble,” said Vince Beltrami of the AFL-CIO, one of the speakers at the conference.
Construction industry growth
The fact that all of the major projects on the horizon involve the construction of industrial facilities and infrastructure places the construction industry and its skilled trades at the center of the workforce problem. Dick Cattanach, executive director of the Associated General Contractors of Alaska, explained that an injection of petrodollars from the burgeoning oil industry fueled an initial construction growth in the late 1970s. And, after a dip in activity during the oil price slump of the mid-1980s, the industry has grown steadily.
“Since that time construction has been in a steady upward growth,” Cattanach said. “… It’s also one of the highest paying industries, paying just under $60,000 per year for construction workers, second only to the oil and gas industry.”
The growth rate has been significantly exceeding U.S. Department of Labor projections of growth of 1.5 percent per year, Cattanach said.
But many of the current construction workers are starting to approach retirement age. For example, 30 percent of carpenters are now over 45 — construction workers tend to retire early.
“Usually by 55 most workers are leaving the industry,” Cattanach said.
The combination of continuing growth in the industry and the high rate of retirement will drive a need for large numbers of new craftspeople. Without even taking into account the needs of new mega-projects, 1,200 new carpenters will be needed over the next decade, Cattanach said.
And that doesn’t take into account a desire to increase the number of workers who are resident in Alaska — 18 percent of Alaska workers are currently non-resident, Cattanach said. Increasing the proportion of carpenters who are resident to 90 percent would raise the quantity of new carpenters required to 2,100 over the decade.
Unfortunately, Alaska is unlikely to be able to import enough new craftspeople because unemployment rates in U.S. urban centers are already quite low and only a portion of unemployed people are interested in entering a craft trade.
“We’re going to have to grow our own,” Cattanach said.
Not enough graduates
But the statistics on the numbers of Alaska school graduates don’t look too promising.
There has been an annual average of about 7,000 high school graduates in Alaska since 1999, Cattanach said. On average 30 percent of these graduates go to college, leaving 4,900 to enter the workforce. The construction industry would need 23 percent of those available high school graduates to meet its annual needs, despite the fact that construction only employs about 6 percent of the total Alaska workforce.
Cattanach also said that the current rate of completion of apprenticeships in Alaska only meets about 15 percent of the construction industry’s needs. Most construction jobs require on-the-job training, he said.
And Beltrami described the trade union apprenticeship programs, funded by labor and management under joint apprenticeship and training committees.
“Our skill training, on-the-job training and in the classroom, is absolutely unparalleled in my opinion,” Beltrami said, adding that these courses provide a viable alternative to college. “… We have the infrastructure that we’ve built by committing money out of our own pockets, management and labor, to build facilities, curriculum, keeping classroom structures on the cutting edge of our respective trades.”
However, Beltrami said that there is in general a shortage of educated applicants for the programs and that many people struggle with essential math and science skills.
“There’s an inability of many of the applicants that we see to transpose simple fractions on a tape measure into real-world applications needed to turn a blueprint into a building, and that is a travesty,” Beltrami said.
And Jeff Staser, principal of the Staser Group, also emphasized the necessity for entrants to the job market to be work ready. People need verbal and written communications skills; problem solving ability; math and science ability; management skills; and an ability to work with things, Staser said.
So, how well does the Alaska education system prepare people for work?
Career and technical training
Several speakers talked about the issue of integrating career and technical training (otherwise known as vocational training) into school and post-secondary education programs.
Mary Lou Madden, president of Madden Associates, reviewed the results of two past analyses of vocational training in Alaska. The Alaska Department of Education did one of these studies in 1996-97, while the Alaska Department of Labor carried out the other study in 2003. Considerable changes in Alaska vocational training occurred in the time between the two studies, Madden said.
In the 1990s the state funded approved vocational courses for high school students and three out of five students underwent some form of vocational training, Madden said. But at that time the University of Alaska offered little vocational training. The university did not have categorical funding for career and technical training and did not account for the number of students enrolled in technical courses.
The state provided some funding for technical training outside of the university and there was private-sector technical training, fueled by the Alaska student loan program.
By 2003 the emphasis on career and technical training moved from secondary schools to post-secondary education, with categorical funding for vocational training disappearing from the secondary level and fewer career-related electives available in the secondary system, Madden said. On the other hand “there has been a lot more activity happening at the university level,” Madden said.
Madden urged the need to do something about secondary vocational education and even to introduce career oriented education in elementary schools.
“We need to have industry involvement at the local level,” Madden said. “… We need to get back to career education.”
Beltrami urged the need for adequate school funding to minimize class sizes, attract qualified teachers and attack the problem of “spiraling (student) dropout rates.” He particularly praised the King Career Center for its vocational classes but said that only a few Anchorage School District students are able to attend those classes.
“Otherwise, shop classes or other forms of vocational education are virtually non-existent in the individual schools and districts around the state,” Beltrami said. “It is these … hands-on programs that help reinforce the concepts of math, English, science.”
Cattanach also sees a need to emphasize more vocational training.
“We need to change Alaska’s approach to secondary education,” Cattanach said. “We need more vocational training. … What other work opportunities do (students) have? Flipping hamburgers is not a career path.”
Staser said that a survey done by the Dittman group indicated a problem with the availability of information about training and jobs.
“About 80 percent of people find jobs through word of mouth and around 6 percent … find their jobs through the job centers,” Staser said.
Beltrami said that the unions are forming agreements with the King Career Center and with school districts to provide pathways into the unions’ training programs. There are other initiatives, such as a planned expansion to the King Career Center, and “we have a $3 million pipeline training facility in Fairbanks,” Beltrami said.
Cattanach said that the University of Alaska Anchorage is developing a construction management program and that work has started on building an Anchorage construction academy. The academy will provide after-hours programs, as well as serving unemployed people, he said.
Growing Native workforce
M.J. Longley, chief of operations for the Cook Inlet Tribal Counsel, talked about the growing size of the Alaska Native workforce. The Native population in Alaska is projected to grow from 120,000 to 165,000 by 2020, with 50 percent of Native Alaskans living in an urban environment by that time, Longley said.
But although Native corporations and non-profit organizations constitute major employment drivers in Alaska, unemployment levels in the Native population remain relatively high.
“The statistics … indicate that close to half of Alaska Native women and men are working in the cash economy,” Longley said. The unemployment rate in Anchorage for Alaska Natives is 18.37 percent, compared with an overall average unemployment rate of 6.9 percent, she said. Transportation, training and work experience can all present problems for Native people looking for work, she said.
“A huge percentage of our people are not work ready, particularly those who are new to the urban environment,” Longley said, adding that people are moving from rural communities into the urban areas because of economic issues in rural Alaska. She said that more vocational training centers are needed to provide intensive training for a Native population that is in transition.
Longley said that training programs for Alaska Natives are available with funding through section 166 of the U.S. Workforce Investment Act. And the Cook Inlet Tribal Counsel has made workforce development a top priority — the counsel has opened a large new Anchorage training office that provides a wealth of services, she said.
PARW
Putting Alaska Resources to Work, or PARW, an alliance of the oil, gas and mining industries and of workforce development organizations, is moving ahead with an initiative to tackle the shortage of skilled labor in the industries represented by the alliance members. Although these industries are not in themselves especially labor intensive, major capital projects will require huge numbers of workers, particularly for construction, Dave Rees, senior technical resourcing specialist for BP, explained.
“We’ve got consistent growth in a lot of construction, consistent growth in retirement in the state,” Rees said.
PARW’s planning committee has reviewed studies of workforce development done by other organizations. From these studies the committee identified four main strategies that PARW is now pursuing.
1. Engage the stakeholders in workforce development “to move Alaskans from a vague awareness of the issues to active participation in solving the challenges.”
2. Train the workforce, with a focus on lifelong learning and providing career pathways.
3. Employ skilled Alaskans by communicating specific training needs to training providers and using web-based communications for job placement.
4. Adaptively sustain the training system by adequately funding vocational training.
Recommendations
At the end of the workforce development conference, the conference participants made four main recommendations for the governor and state Legislature.
1. Establish, in collaboration with private sector employers, a clearly articulated career and technical education program in Alaska that has long-term funding. The program should encompass a wide range of different education institutions and should include options such as apprenticeships, internships and private education programs.
2. Establish a career and technical education outreach program where employers can partner with the State of Alaska, the University of Alaska, local schools and tribal partners to help people learn about training, internships, apprenticeships and employment opportunities.
3. Build on an existing Internet-based system that enables prospective employees to find training and job opportunities, and that helps employers find employees.
4. Restructure the Alaska Workforce Investment Board by establishing a direct reporting relationship with the governor, making the board industry pertinent and establishing full-time professional staff. The board provides policy oversight of state and federally funded job training and vocational education programs.
The conference participants elected not to recommend re-instatement of a state student loan program, nor a suggestion that the state should be required to use apprentices from accredited apprenticeship programs in state capital projects.
