Friday, July 29, 2016

The Infrastructure Labor Market

The labor force is made up of people. People vary in every conceivable way. One person is artistic while another can only draw stick people. One person might be able to disassemble and reassemble a car engine while another might not know what an alternator is. We are different. We have different aptitudes and abilities. Parallel to this variability, jobs are different. High levels of education do make it possible to work in high-skill occupations that return high incomes. But not everyone is cut out for higher education or has the means to obtain higher education. Therefore, they might end up in “lesser” or “unimportant” jobs. But is that accurate? Are their job options inferior and unimportant?

A recent Brookings Institution report brings to light a segment of the economy that is highly important yet is dependent upon the labor force that may not be built for, have the economic means, or desire to attain a college degree or higher. Brookings identifies a niche they call the infrastructure economy. As Brookings notes, “Infrastructure helps facilitate the exchange of information, drive production, and deliver resources, spanning multiple sectors of the economy and serving as a foundation to long-term growth.” It goes further to note that “Infrastructure jobs depend on a steady stream of talent to construct, operate, design, and govern the country’s major physical assets.” 

Brookings also documents why these infrastructure jobs can appeal to the individual. “Infrastructure occupations also boast competitive wages with relatively low barriers to entry, frequently paying up to 30 percent more to workers with a high school diploma or less compared to those in all other occupations. Plumbers, truck mechanics, and power line installers are among the numerous infrastructure occupations that fall into this category, which tend to emphasize on-the-job training rather than higher levels of formal education.”

Brookings identified 95 occupations that support the infrastructure foundation. Their work was well founded and designed. This intrigued us to develop a profile of said infrastructure configuration for the Utah economy. We could not replicate the Brookings work in terms of finalizing upon infrastructure industries, but we could place our focus instead upon all infrastructure occupations. Infrastructure occupations do not have to be found in only infrastructure industries. A helicopter pilot, an infrastructure occupation, may fly a medical helicopter for a hospital, even though said hospital is not categorized as an infrastructure industry. What is important is that there are occupations that Brookings has identified as key occupations that help to keep the economy operating, growing, designed, and governed. And a practical appeal is that many of these jobs offer low barriers to entry while supplying competitive wages.

 Across the nation, these occupations number 11.9 million, or 8.8 percent of all occupational employment. In Utah, these jobs number around 121,400, also 8.8 percent of all occupational employment. Again, the appeal of these jobs is not just that they fundamentally support so many other jobs and industries in the economy, but that these jobs don’t require a high level of education or formalized training for entry. Oftentimes these occupations emphasize only on-the-job training. Yet, these jobs pay on average 22 percent higher in Utah than other occupations that are willing to accept only a high school diploma or less.

Utah’s higher proportion of employment relative to the nation in various infrastructure occupations include reservation and transportation agents/clerks, transportation inspectors, transportation attendants, forest and conservation technicians, petroleum refinery operators, and airfield operations specialists, among others. Utah does have its unique structuring across its different geographic regions, and this will include the possibility of a different profile of the Infrastructure economy in each local region.

The following is an infrastructure profile for the Carbon, Daggett, Emery, Grand, San Juan, and Uintah Counties, collectively known as the Eastern Region. Eastern Utah There are 7,165 infrastructure jobs in the Eastern Region. This constitutes 14 percent of all employment. Relative to the U.S., these jobs are more concentrated in the region; infrastructure jobs are 1.5 times more prevalent in this region than they are nationally.

The Eastern Region economy is dominated by natural resource extraction, and there is considerable overlap between this industry and infrastructure related occupations. Most prominently represented are heavy truck and tractor-trailer drivers. These jobs are 3 times more prevalent in the region than in the U.S. economy as a whole. In 2014, there were 2,402 truck driving jobs in the Eastern Region, or a third of the infrastructure job base. That occupation is expected to grow by 7.5 percent by 2024. The 2015 median wage was $23.39/hour, which is considerably above the statewide wage of $20.37/hour. 

Infrastructure jobs in the U.S. are projected to grow at 7.8 percent by 2024. This is slightly less than the 8.1 percent projected for the Eastern Region as a whole. Accordingly, the share of infrastructure jobs nationally is projected to decline slightly from 2014 levels. Infrastructure jobs requiring less than a Bachelor’s degree pay roughly 32 percent more than similar jobs in the overall Eastern Utah economy. The employment-weighted median wage for jobs not requiring a college degree is $22.70/hour; the analogous number for non-infrastructure jobs is $17.25/hour.

These jobs usually require moderate educational attainment. Almost 43 percent of these occupations require a high school diploma or equivalent. About an equal percentage require some post-secondary education. Only 13 percent of the occupations are open to workers with less than high school education.

 Infrastructure occupations usually require at least modest on-the-job training. Some 55 percent of occupations involve short term training. Long term on-the-job training is required for 20 percent of infrastructure jobs