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Infrastructure Projects Create $25 Per Hour Bidding War For Employees

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42 comments on Infrastructure Projects Create $25 Per Hour Bidding War For Employees

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Bidding War for Employees

On November 15, 2021, President Biden signed a $1 trillion infrastructure package, including $550 billion more federal spending on roads, bridges, and expanded broadband.

To allure workers, contractors offer signing bonuses and housing allowances.

The money’s there to spend, but Labor Shortage Stymies Construction Work.

Associated General Contractors of America, which represents more than 27,000 construction companies, said publicly funded transportation projects are routinely coming in at least 20% higher than government officials anticipated because of added labor costs, as well as inflationary factors such as higher prices for fuel and raw materials.

“The severity of the labor shortage means you’re paying workers more and your construction schedules are longer, both of which are big drivers in overall cost,” said Brian Turmail, the industry group’s vice president of public affairs and strategic initiatives.

Administration officials are working to address the workforce shortages, including hosting a “talent pipeline challenge” last week to develop workforce training programs for jobs in construction as well as broadband and electric-vehicle charging infrastructure.

Stealing Talent

Individual companies stealing talent from each other through bidding wars doesn’t advance Mr. Biden’s overall goal of tackling America’s longstanding infrastructure needs, said Ananth Prasad, president of the Florida Transportation Builders’ Association.

Nor does it lend any credibility to Biden’s persistent message “This is Putin’s Inflation.”

Free Money, Not Enough Workers

“A lot of my lifetime, the big constraint on infrastructure work has been just a lack of funding and a failure to invest,” Transportation Secretary Pete Buttigieg said. “We got the funding. Now we have got to make sure that we have the raw materials, the technical capacity and the workforce to actually get it done.”

We just need more raw materials, the technical capacity and the workforce to actually get things done.

That should be no problem now that Biden is hosting a “talent pipeline challenge”.

Here’s the Best Combined Explanation for Surging Inflation: Cascading Idiocy

In case you missed it, Here’s the Best Combined Explanation for Surging Inflation: Cascading Idiocy

This post originated at MishTalk.Com.

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42 Comments
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Oldest Most Voted
Lisa_Hooker
Lisa_Hooker
3 years ago
“Now we have got to make sure that we have the raw materials, the technical capacity and the workforce to actually get it done.”
That reminds me.
If we had some eggs we could have ham and eggs.
If we had some ham.
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Jojo
Jojo
3 years ago
Reply to  Lisa_Hooker
Stone soup could satiate all!
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RonJ
RonJ
3 years ago
Government is getting very adept at creating problems.
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vboring
vboring
3 years ago
This is why infrastructure isn’t a solution to recessions anymore in the US.
All infrastructure work is skilled. It can’t and won’t employ millions of unskilled laborers.
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Zardoz
Zardoz
3 years ago
Reply to  vboring
I think our biggest problem is what to do with 150 million people that are basically useless.
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8dots
8dots
3 years ago
Young software engineers hired for failed projects will flood the market, only the best will survive. Those in their 40’s are relatively cheaper than the the rookies in their twenties. Software engineers might design robots that replace software engineer to perform simple tasks.
HR of large co are not flying to elite colleges, setting their shows, to hire engineers like they did before 2020, because the price of entry level is too high. Ilan is down. // The 1.1B boomers moving to the next phase is good for the tax collectors, bad for RE. Large houses <==> large coaches.
Minis are next. If u got the minis u are safe.The ultra, the top of the RE pyramid are in liquidation. They will press every level underneath. Badly injured RE will not recover for decades, eaten by inflation. When there will be no hope for landlords, when contractors work for nothing, just to maintain some skills, it’s time to buy.
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Webej
Webej
3 years ago
Funding secured by issuing money
We just need more raw materials, the technical capacity and the workforce to actually get things done.
In what way is this different from the travails of any other third world country?
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Jojo
Jojo
3 years ago
Robots will solve these problems once and for all.
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killben
killben
3 years ago
When you (inflation) have friends like this (Biden, Boris, Ursula etc. – who drown sane voices) why do you need enemies (Putin)?
We have to only pray that they do not come to their senses and keep it up.
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8dots
8dots
3 years ago
Over one million elderly expired from covid in the last two years. Sixty million boomers will retire until 2030. With deflated COLA many can hardly survive. They will liquidate assets flooding the market with no demand. High energy prices and high wages will cause 2-3 recessions. They will come in clusters until 2032.
A project mgr interview a young software engineer. His asking price was higher than her salary. These stuff will end soon in the next recession.
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Zardoz
Zardoz
3 years ago
Reply to  8dots
He’ll probably get that salary somewhere, too.
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MPO45
MPO45
3 years ago
Reply to  8dots
“A project mgr interview a young software engineer. His asking price was higher than her salary. These stuff will end soon in the next recession.”
I highly doubt that will happen. Software engineers are in HIGH demand because of their skill set. On the one hand, everyone wants automation, robots, and artificial intelligence to solve all the worlds problems, on the other hand there aren’t enough people in the world with these skill sets. We also have a global aging population, while there are 60 million boomers in the US that will retire in 2030, there are 1.1 BILLION boomers around the world that will do the same. Not all will have the luxury of “retiring” but it won’t matter, there will be demand but less productivity.
There are far more project managers (easy job) than there are software engineers (hard job). Salaries will go much higher for software engineers and lower for project managers.
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PapaDave
PapaDave
3 years ago
Reply to  8dots
No problem. Just open up the country to highly skilled immigrants. After all, that’s how our country has grown to be largest economy in the world, while Japan is mired in three decades of close to zero growth because they won’t follow our welcoming example.
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Zardoz
Zardoz
3 years ago
Reply to  PapaDave
We have the skilled immigrants working remotely already, and they ain’t working cheap.
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PapaDave
PapaDave
3 years ago
Reply to  Zardoz
Good. Lets get more of them before someone else does.
Highly skilled is worth paying up for.
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PapaDave
PapaDave
3 years ago
Goodness knows the US infrastructure needs upgrading badly. A trillion is a drop in the bucket of what is needed.
Most of our infrastructure is so old and worn out that it hurts our efficiency and out economic growth.
Many of our water and sewer systems are so old that they waste a lot of our available water at a time when water is in short supply in parts of the country.
Our roads and bridges keep falling apart as anyone who drives much can attest to.
We have no high speed rail and our airports are overcrowded. Public transit is hit and miss.
And our electrical grids need trillions in upgrades to get them ready for a future with renewables and electric cars. Except for Texas where they are determined to take their grid backwards.
I find it odd that Mish talks about being in a recession right now, given the continuing labor shortage and demand for workers as he just outlined.
And I struggle to understand where the demand destruction for oil and gas is going to come from as some here keep repeating, saying that a recession is going to decimate workers and cut fuel demand. This post flies in the face of that claim as well.
Recession or not, I expect the demand for oil and gas to stay strong and for prices to stay high or even go up.
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MPO45
MPO45
3 years ago
Reply to  PapaDave
From the Romans to the Mayans, all empires disintegrate over time. I think it happens because societies run out of cheap/slave labor and all that’s left are older people that can’t do the real heavy lifting needed to keep a society running so it fails over time.
In modern times, it ends with one word: DEFAULT.
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PapaDave
PapaDave
3 years ago
Reply to  MPO45
We have something the Mayans didn’t. A world full of skilled people, many of whom would like to live and work in the US.
And many empires slip and then come back even stronger. Just like many companies.
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Jack
Jack
3 years ago
Reply to  PapaDave
60 milliom retirees in US (or 1 billion worldwide as someone mentioned above) do not need to drive daily.
Software engineers do not need to drive.
This will be demand destruction.
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PapaDave
PapaDave
3 years ago
Reply to  Jack
Retirees have more time all day to go out and explore the world.
Working from home or from anywhere you are, does not mean that those people don’t drive. They just don’t drive to work.
Regardless:
Let me know when gasoline inventories start rising. They have been falling all year as demand continues to exceed supply.
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Six000mileyear
Six000mileyear
3 years ago
This is a GREAT OPPORTUNITY for people with delinquent student loans to start repaying them.
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MPO45
MPO45
3 years ago
Amazon pays warehouse workers $30/hour but they burn thru so many people that they won’t have any more by 2024. Got Labor Shortage?
“If we continue business as usual, Amazon will deplete the available labor supply in the US network by 2024,” said the document, according to Vox.
Don’t forget 60 million boomers will be out the door by 2030, that will do wonders for inflation and productivity, more demand less production. I’ll be watching from far away collecting juicy rent from my rental properties and investments, been hoarding popcorn for all the fun times coming.
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Casual_Observer2020
Casual_Observer2020
3 years ago
Given baseline inflation has been going up forever and wages really haven’t, at some point the rock and hard place were bound to meet.
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Zardoz
Zardoz
3 years ago
Reply to  Casual_Observer2020
They can’t work if they can’t eat.
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Carl_R
Carl_R
3 years ago
Reply to  Casual_Observer2020
What? Wages have gone up a ton around here, probably 20% in the last two years. In any case, the rising wages will trigger more inflation, so nothing to worry about.
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dtj
dtj
3 years ago
Construction employment has been depressed since the pandemic started. Pre-covid employment levels were only reached very recently.
$25 is what a meal at Five Guys costs in 2022. After taxes it would take a $25 per hour worker 1.5 hours to pay for lunch.
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jhrodd
jhrodd
3 years ago
Reply to  dtj
You must be really fat. I don’t eat much fast food, but I have been to Five guys. A little cheese burger and a cup of water is about $8, that’s all I’ve ever had there and it’s still too much food. My wife and I went to In ‘n Out the other day and split a single burger and an order of fries. That was plenty of lunch for 2 normal sized people .
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wolves
wolves
3 years ago
Reply to  jhrodd
I’ve been content to read Mish’s posts and the comments here for years without writing my own, but your reply to dtj really irked me. jhrodd, either you are blessed with a slow metabolism or you are blessed to not have to work a job that requires hard manual labor or intense mental concentration, which also burns a lot of calories (e.g. professional chess players). I don’t know about dtj, but pick on someone your own size (or smaller); I have a body mass index of 21.25. I would have to eat two of those burgers to provide me with enough energy to get through through the afternoon work day, and that wouldn’t be a sustainable meal to have everyday because it isn’t healthy enough. I only had to lift 40 lbs objects today but sometimes have to lift 75 lbs; this is not uncommon for manual laborers; many lift more than I do. Even workers who don’t have to lift but do have to be in their feet all day would need a lot more food than half a hamburger and half a side of fries for lunch. Healthy food costs a lot more too. On the rare occasion that I have purchased lunch in 2022, it either cost about $15 but wasn’t enough food or it cost about $20 and was just barely enough. Making my own lunch costs half that but is still significantly more than the $8 you cited if I make enough to fill me up and get me through the work day. It’s difficult for me to believe that half a burger fills you up, but I should assume you are being honest and are an outlier who hasn’t thought about what it is like for others. Also, you didn’t factor in fuel or electricity to drive to the restaurant. Was it actually a $10 meal, or did you walk to In & Out? If the latter, were you not hungry after you walked back?
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jhrodd
jhrodd
3 years ago
Reply to  wolves
Ha! I’m actually the hardest working person you could ever meet. I build houses pretty much solo, only sub out the drywall, insulation, electrical and heating. I do the design, excavation, foundation, framing, siding, roofing, plumbing, tile and flooring, trim, etc. The house I live in now took 18 months @ 7 days a week and I fractured my L1 vertebrae about 3 months in. All my subfloor is 1-1/8 plywood, I have a 1300 sq.ft. shop with a 12′ ceiling, got rooftop delivery of the trusses for the shop but the house trusses I had set on the ground since I hadn’t started framing it yet ( I’m on an island with expensive delivery charges), so had to haul them up to the plate line later by hand. Some of the metal roofing panels were 40′ long and had to haul those up to the second story by hand as well. The house is 35 feet tall on a fairly steep site. I had a lot of 5/8 Hardie shiplap siding that weighs 64# per 12′ stick, try carrying that up a ladder! Also, I’m 71 years old, 5’9, 160#, don’t take any medication. I’ll probably live to be 100. I’m designing a house for a couple acre site in Tucson right now (winter house) and I’ll build that solo as well, but it will be one story, flat roof, easy peasy….. Over eating is a killer and an epidemic in this Country.
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wolves
wolves
3 years ago
Reply to  jhrodd
(1) I respect your work ethic and your independence. That’s awesome that you are doing all that at 71. I hope you do live to 100, and I hope you (and all of us) get to see a better world in 2050.
(2) Many (if not most) of the Americans who overeat low nutrient foods also under-eat high nutrient foods. For some, the reason is primarily poor choices and bad habits. It seems like you think that is everyone. For others, however, the reason is primarily economic.
(3) Even in America, people’s bodies are craving more nutrients.
(4) Forget Five Guys and In & Out; have you gone out for kale salads recently? $? $$? $$$?
(5) Even though my nominal wage in 2014 was less than half what it is today, I could afford to make a hearty salad with organic ingredients including kale or spinach, cilantro, almonds or walnuts, an avocado, chicken or goat cheese, sprouts, fresh berries, healthy oil, and balsamic vinegar. That would be my dinner. I can’t afford to eat that healthfully anymore, and I’m sure I’m not alone in this. I’m having to switch to more grains – think rice, quinoa, and beans as the base food. It’s not the end of the world, but it’s definitely a downgrade from what was. I don’t think my circumstances are unique. I imagine a large percentage of the Americans who were making good dietary choices can’t afford to eat as healthfully anymore.
(6) A lot of us worked our asses off and earned raises every year, which was supposed to increase our quality of life. With inflation making a mockery of our previous wage increases, what’s the point of working so hard? I’m still working hard out of habit, but I’m not sure it’s rational anymore.
(7) I’m buying an indoor hydroponic system to grow my own herbs and greens so that I can eat salad again. Hopefully this is part of a larger trend and people learn to live more independently.
(8) I am thankful to have food. I’m worried that Mish is right that millions will starve over the next year. Does anyone know if there are significant efforts to prevent that?
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Webej
Webej
3 years ago
Reply to  wolves
Covid lock-downs and now war are killers for the poor people of the world, hundreds of millions have been put on the other side of food insecurity. Although there are UN, government, and private agencies that do good work, funding will not be going up if everybody has decided to double down on tanks & aircraft carriers, especially when food inputs (diesel, fertilizer) and food prices has sky-rocketed.
Worst off are countries under IMF tutelage that have been forced to go open market and need to buy grain in global markets because they do not produce enough domestically.
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jhrodd
jhrodd
3 years ago
Reply to  wolves
We grow our own vegetables in season and yes we have an abundance of Kale out there. There are a lot of small farms on our island so we get fresh eggs, locally raised Lamb and Pork. Chris Pratt (actor) even has a farm here with amazing Pork. We are foodies, to be honest and make everything from scratch with the best ingredients we can find. Food is probably a large part of our budget, but since we don’t have any debt, live about 1/4 mile from everything we need, and do everything for ourselves; car repair, yard work ( I have a Kubota tractor), home repair, etc. we live well below our means and we really don’t give a single thought to the cost of food, I’ve heard it’s gone up but haven’t really noticed that personally.
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Christoball
Christoball
3 years ago
Reply to  jhrodd
Sounds like San Jaun Island is a rough neighborhood. Many people through no choice of their own live in less fertile areas.
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Ron Cataldi
Ron Cataldi
3 years ago
Reply to  jhrodd
Old people eat like birds, we know
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wolves
wolves
3 years ago
Reply to  jhrodd
Good for you drinking water though. Sugary soft drinks are poison.
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SleemoG
SleemoG
3 years ago
Reply to  dtj
That escalated quickly!
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Bbbbbbb
Bbbbbbb
3 years ago
Workers wages stagnate for decades, real wages are lower in 12 of the last 13 months, corporate profits soar, and financial speculation is juiced by 0% interest rates and FED liquidity, but the problem is that workers are paid TOO MUCH to rebuild the decades-rotting infrastructure?
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Casual_Observer2020
Casual_Observer2020
3 years ago
$25 per hour seems cheap for infrastructure jobs in the current inflationary environment.
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SAKMAN1
SAKMAN1
3 years ago
Reply to  Casual_Observer2020
Illegal day laborers were getting 300-400 USD per day in LA doing flips just a few months ago.
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Felix_Mish
Felix_Mish
3 years ago
Reply to  SAKMAN1
$40-$50 and hour might explain why people seem eager to get over the southern border.
Also, a low-end LA area roofing estimate I know of went from 20k to 30k in the last 3 or 4 years. Difficult roof for LA, though, to be fair.
For customers, too bad robotics are not as advanced, nor as cheap as our imaginations think they are. For the working person, it’s about time wages kicked in to gear.
In today’s world, cheap people are hard to come by. Which is nice. For people.
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Zardoz
Zardoz
3 years ago
Reply to  Felix_Mish
“People were put on this earth for you to exploit” – Supply Side Jesus
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Jojo
Jojo
3 years ago
Reply to  Felix_Mish
The more hourly rates are increased, the more incentive to move to a robot solution.
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