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Throughout a summerlong, statewide listening tour, Oregon legislators on the Joint Interim Committee on Transportation Preservation and Modernization have heard lots of comments about the sorry state of Oregon’s roads. They’ve received much input from residents and interest groups about what road work they’d like to see done.

But one subject has not come up as the wheels start turning on a 2017 transportation funding package: the construction labor shortage. With work abundant, builders are increasingly reporting difficulty hiring good help for the field, and the consensus is it’s a generational problem. Real-world consequences include rising costs of public projects, as firms become choosier and bid at a premium. Some public agencies are even putting off projects until things cool down.

What legislators aren’t discussing at town hall meetings is that if a $2 billion package were enacted today, it’s not clear whether the construction labor force in Oregon would be able to handle it.

On the road

Like many states, Oregon has roads and bridges that don’t fare well in evaluations by the American Society of Civil Engineers. A 2014 study by the Oregon Department of Transportation, titled 鈥淩ough Roads Ahead: The Cost of Poor Highway Conditions to Oregon’s Economy,鈥� describes worsening road and bridge conditions, and a growing backlog of big capital projects. The report makes the case that road and bridge infrastructure is the foundation of economic activity in Oregon, and in critical need of maintenance and expansion.

Oregon Sen. Betsy Johnson, D-Scappoose, and other members of the special legislative committee charged with developing a 2017 transportation package have spent much of their summer on a statewide trek with a goal of determining the state’s infrastructure needs. (Two more meetings remain 鈥� in Newport on Sept. 15, and in Hillsboro on Sept. 19.) So far, interest groups have come 鈥渨ell prepared鈥� to these information-gathering meetings, according to Johnson. She worries that with so many varied interests, and so much work to do around Oregon, the tour might have left many with 鈥渦nfulfillable expectations.鈥�

鈥淚 wish that we were actually using some of this time this summer negotiating a package, and taking a finished package out on the road to gauge Oregonians’ reactions to it,鈥� she said. 鈥淚nstead what we’re doing is going to some selected communities and we are hearing in each one of those communities the lamentation about a lack of money, the number of projects, and their wish lists.鈥�

Oregonians have hammered home several points, Johnson said, including the idea that Portland isn’t like the rest of the state, and that coastal communities face a greater threat from a Cascadia subduction zone event. But the matter of workforce hasn’t come up once.

Question time

Fred Saunders, chief project engineer for the city of Grants Pass, was recently preparing to field questions from his city council. He planned to ask it at the next council meeting for approval of a nearly mile-long sewer project that drew bids substantially higher than the official estimate.

鈥淵ou write a bid for $297,000 and it comes back $416,000, somebody’s going to ask questions,鈥� he said.

This year, an ODOT chip seal project in Klamath Falls received no bids. ODOT crews will likely have to perform the work themselves, according to spokesman Dave Thompson. It was the same story for a small paving project off of Interstate 84 near Pendleton. That project was eventually put back out to bid, with the winner’s bid coming in two times the engineer’s estimate.

鈥淲e’re hearing about it from our purchasing department,鈥� Thompson said. 鈥淎nd we’re hearing the same thing from our contractors, who are quite concerned about this.鈥�

The construction industry in Oregon is now several years out of recession and humming along. It’s no secret that most firms, when given the choice, prefer tackling private projects over public ones, which have greater restrictions and often-slimmer profit margins.

Without needing to push themselves to the breaking point to stay open, few contractors are choosing to do so, said Larry Sitz, CEO of Emerick Construction.

鈥淚t’s probably affected the choices we would make in terms of sponsoring explosive growth,鈥� he said. 鈥淔ortunately, the market is good enough we don’t have to push volume. The margins are creeping up a little bit. We can have good construction years without just having to highball it in terms of volume.鈥�

Since TriMet’s orange line project wrapped up, and other bond-funded work concluded, most of the transportation workers in Oregon have either left the industry or taken work outside of the state, according to John Mohlis, who recently retired as head of the Oregon State Building and Construction Trades Council. But he doesn’t think that would stop transportation work from being completed. Labor unions can staff through surges in work, in part because they can pull 鈥渢ravelers鈥� from out of state. This was the case in a recent tech building boom around 10 chip plants in the Portland-Vancouver, Washington area.

And if the Legislature were to pass a transportation package next year, it wouldn’t be phased for 12 to 18 months, as existing modernization projects expire.

Oregon Sen. Brian Boquist, R-Dallas, said the goal would not be to ramp up work, but rather steadily continue current approaches with possible 鈥渟light, steady increases.鈥�

鈥�(I) do not see labor as a real problem given many Oregon companies are working out of state, and thus could easily bid in state,鈥� he said.

Trade up
The labor shortage is said to be the result of long-term demographic and cultural trends. The standard explanation is that baby boomers who delayed retirement during the Great Recession are now starting to do so in large numbers. And since the early 1990s, children have been pushed increasingly toward college, and manual-labor jobs have been stigmatized.

And though the industry is rapidly adding workers, a shortage is real, according to new data gathered from more than 1,400 companies.

鈥淭he national totals clearly show firms continue to have difficulty finding many types of workers,” said Ken Simonson, chief economist for Associated General Contractors of America.

According to the Bureau of Labor Statistics, in 2016, there were only 410,000 unemployed construction workers in the U.S., or about a quarter as many as in 2009, and the fewest in July since 2000.

The unemployment rate for construction was 4.5 percent, whereas the rate for all workers 16 and over was 5.1 percent. And job openings in construction in June (the latest month available) reached the highest level since 2007, while hires remained relatively constant, suggesting that contractors are keeping jobs posted for longer.

Bottom line

Despite a lack of ideal workers, Simonson said he hasn’t heard of delayed project completions. He figures firms are doing some mix of three things: increasing the hours of current workers, adding less-experienced workers, and turning to labor-saving equipment and methods.

鈥淭he construction industry will find a way to produce the infrastructure, whatever the employment situation is at a given time,鈥� he said.

It’s also not known what the effect of Measure 97 could have in Oregon. The proposed sales tax on large corporations would generate millions of dollars from oil and gas companies, and there remains the open question of whether this money should be earmarked for transportation projects

Another hitch is that there’s talk of Gov. Kate Brown putting forward her own transportation package. A spokesperson for her office denied that, saying it’s still early in the process.

One company that would stand to benefit from a state transportation package is Knife River Materials, a major concrete supplier. CEO Brian Gray said he thinks people will return to the industry, and to Oregon, if the work is here.

鈥淗ere’s the bottom line: When the work is there, we will get it done and we’ll do it right,鈥� he said. 鈥淚f the state steps up and delivers a long-term, stable funding package to improve Oregon’s roads and bridges, we will be right there waiting to put our team to work.鈥�

Saunders of Grants Pass said that as a public servant, he doesn’t like to waste time. But he’s been thinking about delaying and extending some projects, to ensure the flow is steady into the future.

鈥淲e’ll be working on these projects for a few years,鈥� he said.