It seems like there’s a building being renovated or going up weekly in Sioux Falls, but the growing pains are starting to sting for those charged with building the city.
Paul Muth has been helping run his family’s business for years running electricity for all of Sioux Falls and throughout the region. And with all the new construction, Muth Electric has never been busier. Yet Muth is saying no to projects, because they can’t get enough electricians on staff.
It’s not just him.
“The construction industry’s inability is the highest I’ve seen: mechanical, general contractors, block layers, welders. I mean we’re all talking about how we can’t get enough people hired,” Muth, the president/CEO of the company, said.
And construction and its related jobs are losing workers.
There were 100 fewer jobs in May than in April in the construction field in South Dakota, accounting for a 0.4% dip in employment. Meanwhile manufacturing grew 0.5%, which is about 1,200 jobs, according to state labor department data.
Nationwide, 17 of 18 manufacturing industries reported growth in June, according to the Institute for Supply Management, and that means everything from coal to computers are being made. Yet in manufacturing, there’s a similar story.
“Workforce is certainly an issue for every manufacturing client we’re working with this year,” said Morgan Larson, a business advisor for South Dakota Manufacturing and Technology Solutions, which helps create training programs and hiring practices for factories.
SDMTS is a program tackling the issue with workforce development and incentives.
The organization crafts incentive programs to help employers get and keep staff on. Hiring and referral bonuses, tuition reimbursement plus plenty of safety training and overtime are all being used more often as incentives for employees in the industry.
Still, there likely won’t be enough construction or factory workers for a while, due to several factors, namely not training enough in time and others quitting altogether.
“The housing (industry) has been quite disappointing because there are no people remaining who want to build a house,” said Chief Economist Michael Englund at Action Economics.
“In South Dakota you see the extreme example of mismatch of geography. There’s former waitresses in the Bronx who would take jobs and can’t because there’s no jobs up there. But people aren’t prone to pack up and move (from) places like New York to places like South Dakota,” Englund said.
With an incredibly low 2.7% unemployment rate, South Dakota has a plethora of jobs but not job-seekers.
And while there may not be enough people, the industry is continuing to grow quickly.
Manufacturing a booming sector in Sioux Falls
Manufacturing in South Dakota is projected to grow 7% by 2028, unlike nationally where a 5% decline is projected, according to a 2020 report from the State Department of Labor and Regulation. Although seven of the state labor department’s list of 69 high wage, high growth “Hot Careers” are found predominantly in manufacturing, schools can’t keep pace.
After its most recent graduation, Southeast Technical College announced 100% job placement for its alumni right after leaving school.
But employers still are feeling the strain.
“People don’t want to work because of the money they can get from their stimulus funds. It’s been very detrimental for us,” said Muth, adding that “Southeast can’t put the grads out fast enough.”
Although the state doesn’t track if stimulus checks lead to quitting jobs, there are definitely more than enough jobs to go around. And the idea of working from home continues to be lucrative for job seekers.
This comes at a time when the Biden Administration’s American Jobs Plan and its INVEST in American Act have passed key votes in Congress. The goal is to create new electric grids, roads and bridges, but it is unknown if there will be enough skilled people in need of a job to meet the 2-3 million jobs in those trades.
Full-ride scholarships and friends get jobs
For those young people who do get into the trades, construction and factory world, the work is lucrative.
“For the most part if you work hard you’ll get compensated for that,” said Jared Ligtenberg, an apprentice electrician at Muth, who graduated from Southeast.
He negotiated a bonus and a pay increase once he graduated from the school while also working for Muth and is making an hourly salary in the $20 range. He chose electricity over welding after talking to a friend who had trouble handling the fumes and other chemical issues of that job.
Indeed, there has always been high turnover in the trades.
And the industry is overwhelmingly white and male. Women are more likely to leave the industry due to pay and family leave issues plus overwhelming sexual harassment. A full 83% of women said they have been subject to unwanted touching, kissing, or other physical advances according to one study published by the American Association of University Women.
Muth has two female electricians and is working to get more people from all walks of life by encouraging referrals. Still, Muth Electric noted that it’s hard work and it can be difficult to get people on board with electrical.
“A lot of my friends graduated from four-year schools and now are not liking their work or … are kind of thinking about switching to what I do,” said Ligtenberg.
Grant Korner has been working for Muth for over two years and is “loving it.” He said he found out about the job at a high school recruitment internship. Both Korner and Ligtenberg said it’s improving now, but when they were in high school, college was pushed over vocational school.
“Muth is paying half my loan and Build Dakota is paying the other half, so I’m coming out of school debt free,” said Korner, a graduate of Mitchell Technical College.
The Build Dakota Scholarship is a full-ride program to get people into technical schools and out into the field. There are two full-ride scholarships it offers, one fully funded by the program itself and another that is a 50/50 split between the fund and a partner in the industry. That company often goes on to hire the student they helped pay to educate, according to the Build Dakota office.
“The benefit for the business is to create a stream of talent from the technical colleges and the student gets a job when they graduate. It’s one of those win-wins for everybody,” said Deni Amundson, the program director for Build Dakota.
“It’s more workforce training than it is just a scholarship,” she said.
“We have 426 students starting this fall. That number is steadily increasing each year as word is growing we have more businesses bringing us non-traditional students,” said Amundson, who said the scholarship continues to build off of funding from $4 million from T. Denny Sanford and Gov. Kristi Noem’s workforce efforts.
Amundson said the faster high schools and businesses work to develop a workforce with the scholarship, the sooner they’ll have one.
Automation to cut costs and turnover
Finally, automation is coming to create new ways of work in the trades and factory world.
Back at South Dakota Manufacturing and Technology Solutions, the LEAN technique shows employees certain ways of picking up or placing items, fixing defects or looking at the floor plan of a building and organizing workers differently. Automation means working better for cheaper. Even Muth Electric uses it, and has saved $200,000 according to SDMTS.
More automation is coming to fill the demand for a workforce that can’t train fast enough, although the timeline of automation versus getting actual people is unknown as of now.
However, already co-working robots, independent robots, and 3-D…