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SEATTLE (AP) -- The average construction worker is well into his 40s, and unless something changes to make the fresh-from-prom set take a sudden interest in framing and drywall, that work force is just going to keep getting older.
In an industry where retirement tends to come early and knowledge is passed down on the job, that trend presents a potentially paralyzing problem -- especially as demand for workers continues to rise.
Crews will be at a loss for skilled workers. Buildings might not go up so quickly. So-called "green initiatives" could falter.
And the young people who passed up those opportunities? Unless they managed to land that desk job at Microsoft, they might have missed out on a chance to make a comfortably upper-middle-class living, some industry experts say.
The shortage isn't confined to carpenters -- it extends to plumbers, stonemasons, electricians, cabinetmakers, welders and a list of other trades that were once sought after.
What has some educators and employers puzzled is that many of those professions offer the chance to make upward of $50,000 right away. But they say a negative perception of the trades coupled with a mounting push for college education has dealt the professions a hard blow in the United States.
Nettie Dokes, manager of Seattle City Light's apprenticeship program, calls apprenticeships "the other four-year degree." (An apprenticeship, often regulated by unions, is a period of on-the-job training that typically lasts one to five years. After that, workers graduate to higher journeyman-level wages.)
Dokes worries how her quickly expanding crews of linemen will be able to retool technologically without new blood coming in.
Years ago, she would hire 20 apprentices every year. Now she has spots for almost 60, and can't guarantee those will be filled.
"Historically here, from even a biblical time, a parent sent their child to apprentice with a skilled trade individual," Dokes, said. "Here for us, after World War II, we made a shift where all of the focus and energy was based around a four-year credentialed program."
The state's community and technical colleges have thousands of students in trade programs.
Enrollment in work force training at the technical and community colleges, which includes some apprenticeships, reached nearly 60,000 five years ago, but has slowly fallen since then. However, the Department of Labor and Industries reports that more than 17,000 workers were in apprenticeships at the end of last year, and that they have been steadily growing through the years.
Still, industry officials say the community colleges and apprenticeships aren't keeping up with demand. And those programs often attract older students, who will end up having shorter working lives.
In Washington, apprentices for state projects can start out earning more than $30 an hour, according to Labor and Industries figures.
"It's not like the college system where you go to college and sit in class -- these folks are out there working in the field," said Halene Sigmund, who oversees apprenticeships for the Bellevue-based Construction Industry Training Council. "They're all making family living wages."
At Seattle Central Community College's wood construction program, boatbuilding instructor Gordon Sanstad tallied the construction industry's woes as he led a tour through the Central District facility. Cabinetmaking, boatbuilding and carpentry -- the program's three emphases -- are fields dominated by "what we call the gray-hair set," he said.
And they're industries where local demand is high.
Even his students are older than you might expect, he said. The average age of those enrolled in the wood construction program is 34.
Sanstad led the way through sawdust-covered workrooms where students labored over projects such as half-scale models of stairs and the naked ribs of what will one day evolve into boats.
Tours, he said, are starting to be a bigger part of his job. At least once a week he leads a group of high school students through the facility, hoping they'll find appealing the prospect of steady work that can't be easily outsourced.
The young students who enroll are often "misfits who can't fit in anywhere else," Sanstad said.
"If they aren't going to the university, what are they going to do?"
Nicole Lundheim paused from working on a half-finished small racing boat to talk about how these days people "don't want to get dirty." The 32-year-old grew up watching her grandfather and father work on houses -- construction is in her blood.
That's not the case with everyone, she said.
"We're in a technological era," Lundheim said. "People aren't exposed to it. I was exposed to it, but I was unique."
Sanstad and other instructors back that theory up. Forty years ago, the program didn't need to have introductory classes for students to learn the basics of construction -- how to operate tools and keep all their fingers at the same time. Now, the course is mandatory.
Frank Worsham, a 52-year-old student, came late to boatbuilding after a career at Boeing -- so he's all too familiar with the aging tendency of the trades.
"I've thought that if I ever did it over, I would do this when I was younger," he said as he bent over a half-finished dinghy. "I don't understand why young people aren't doing these things."
The federal Bureau of Labor Statistics estimates there will be an 18 percent increase in the need for plumbers and pipe fitters from 2004 to 2014. During that same time, demand for carpenters and painters will increase 13 percent, and the need for electricians will go up 14 percent.
Demand for heating, ventilation and air conditioning mechanics and installers will swell 27 percent during that time, according to the bureau's data.
Some economists speculate that "green initiatives" championed by government and corporations will create millions of jobs over the next 10 years, some of which would be technician positions or renovation work.
Problems related to aging work forces haven't gone undetected. Late last year, Gov. Chris Gregoire announced "Running Start for the Trades" grants for 14 school districts, hoping to promote pre-apprenticeship training for students.
That was part of the latest push to mobilize young people toward the trades -- a drive that might be working. In the last two years, the state has seen a 62 percent increase in registered apprentices, said Elizabeth Smith, apprenticeship program manager for the state's Department of Labor and Industries.
But the average ages in apprenticeships still tend to border 30 -- evidence of what Smith and others call "the 10-year drift." After graduating high school, young people apparently work elsewhere before finding their way to the trades.
"I don't know why it is -- I just know that we see it, and we're working on changing it as well as we can," Smith said.
Some educators think schools are at least partly to blame for the diminishing interest young people have in the trades. They complain that WASL (Washington Assessment of Student Learning) scores have taken top priority over elective classes -- music and art along with the trades -- and students don't get to see their career options in the same way they used to.
"We live in tech-central," said Cal Pygott, who leads Bothell High School's construction program. "Every parent thinks their student needs to go to a four-year school. But not every student needs to, wants to, or has the grades or ability to go to a four-year school."
Pygott heads the school's "Construction Academy," which allows high school seniors to complete the first year of construction apprenticeship before graduation. After watching the drop-off in trades-related training years ago, Pygott says he's slowly seeing programs like his re-emerge.
But beyond lack of support from high schools, Pygott said the trades face another problem that can't be remedied by lobbying the Legislature: The industry has an image problem.
Until parents and students stop thinking of construction workers as "some big guy with a beard" who "swears a lot and drinks beer," he said that industry is likely to have a hard time recruiting.
But Pygott thinks parents, students and school districts are missing the big picture: job security.
"We import all or most of our clothing, all or most of our consumer electronics, more and more of our food -- our automobiles are either made overseas or owned by overseas companies," he said.
"But we cannot import our highways. We cannot import our bridges. We cannot import our skyscrapers or our infrastructure."
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State Department of Labor & Industries information on apprenticeships:
http://www.lni.wa.gov/TradesLicensing/Apprenticeship/Become/default.asp
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Information from: Seattle Post-Intelligencer, http://www.seattle-pi.com/
Mar 26 14:42
By TONYA WIESER
Scottsbluff Star-Herald
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CHADRON, Neb. (AP) -- Spring break to most college students means skiing, vacations or a trip home. However, a group of Chadron State College students chose to spend their vacation helping others.
Chadron State College Director of Internships and Career Services Deena Kennell asked in January for volunteers to work with the Hands On Gulf Coast Organization over spring break.
"I was surprised at the student response," Kennell said. "I didn't even think we would get enough to make the trip."
Kennell received 16 applications and had to conduct interviews in order to fill the 12 positions.
The chosen 12 and two staff members left March 1 for a 23-hour trip to Biloxi, Miss., where they spent three days working on houses and other projects.
The group spent the first day assisting with mold removal for a private residence. Their second day involved roadway cleanup as well as the cleaning of drainage systems.
Kennell said the street drains were so clogged that every time it rained, the streets flooded.
Students split up on the third day, during which half of them worked for a neighborhood land and trust involving quick cleanup of community buildings.
Most of the buildings had not yet been checked to see if they were structurally sound. "But we worked on cleaning up the debris so as the property could be at least considered for reconstruction," Kennell said.
The other half of the group worked for a member of the community, assisting with his property.
On the fourth day, the team traveled to New Orleans and spent some time at the Ninth Ward, commonly recognized as the most highly damaged area.
Kennell said they observed the stained water lines on the buildings, along with ax marks left behind from the attempt to save lives.
"We also saw the codes that had been spray-painted on the outside of homes by rescuers," she added.
In each of the four quadrants created by a large X was the number of inhabitants; corpses, if applicable; the date the house was checked; and which team did the checking.
Casinos, hotels and high-end homes have been rebuilt, but there are not as many homes for the average person being rebuilt, she added.
"Casinos were rebuilt right away; however, homes were left untouched," Kennell said. "And we couldn't believe all the trash lying in the ditches, consisting mostly of beer bottles."
Participating in the Hands On Gulf Coast Project along with the Chadron group were 170 other students from 10 schools across the United States.
The teams were sheltered in a large metal building owned by the Methodist Church. They slept in rows upon rows of bunk beds and had to shower outside in a small wooden stall.
The group didn't have a great deal of contact with Katrina victims. But as the students worked along the roadsides people stopped and thanked them for their labor.
"I couldn't have been more proud of a group of students," Kennell said.
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Information from: Star-Herald, http://www.starherald.com
Mar 25 14:16
By TALI ARBEL
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AP Business Writer
Employers are antsy this year. Graduating students, however, remain optimistic.
Employment data nationwide may be flagging, but 73 percent of job-seeking students expect two or more job offers after finishing school, according to a recent survey by MonsterTRAK, a subsidiary of job search company Monster Worldwide Inc.
As of early spring, 59 percent of employers said they would be hiring, 17 percent less than in 2007.
"It's a little bit more of an employer's market -- 29 percent of folks are still unsure" they will hire recent grads, said Mark Charnock, MonsterTRAK vice president. That is twice as many uncertain employers as in last year's survey.
"(Employment) growth rates are pretty solid if you look at it over a longer horizon," said Charnock. While employers may be planning to hire less than last year, he said, in 2003, only one-third of those surveyed planned to take on graduating seniors.
"There are a lot of salary bumps (this year)," he said, because many aging employees are leaving the work force and companies are eager to hire.
The expected average salary for '08 graduates has grown almost 10 percent, to $39,500 from $36,000 for grads last year, in line with increases over the past couple of years, he said.
The MonsterTRAK Entry Level Job Outlook polled 4,720 employers, students and recent alumni online from Feb. 12-22.
While Saran-wrapping the office toilets may seem hilarious to the trickster, a prank that upsets or inconveniences anyone at work may leave him feeling stupid at the end of the day.
In a recent survey, marketing and advertising executives found most felt April Fools' Day jokes to be inappropriate at work.
Even creative professionals don't want to find their cars sitting in the middle of a fountain or have a co-worker break into personal e-mail and send their supervisor a fake letter of resignation -- two examples staffing firm Creative Group offered of unusual or extreme pranking.
"If you don't know how it's going to be perceived, then don't do a practical joke," said Megan Slabinski, executive director of Creative Group.
The man who sent in the fake resignation letter caused a big mess -- senior management got involved in the supposed resignation before the issue was resolved, and the prankster was sent a warning that further inappropriate e-mail use could lead to losing his job.
If you must celebrate April Fools', keep pranks light-spirited and poke fun at yourself, rather than others, said Slabinski. Make sure you're not costing the company money, apologize after, and keep jokes simple to fix.
Creative Group surveyed 250 marketing and advertising executives on the phone in the third quarter of 2007.
Many politicians and consumer advocates (and Michael Moore) have been telling Americans for years that their health insurance coverage leaves much to be desired.
A new survey backed by the AFL-CIO union reveals just how unsatisfied Americans are with the U.S. health care system.
Half of people in families with insurance still can't afford all their care. And 48 percent say they or a family member has unhappily stuck with a job just to keep health care benefits.
Even though 77 percent of survey respondents had health insurance for their households, one-third of those surveyed still said they skipped needed medical care because it was too expensive.
"Of the more than 26,000 people who took this survey, most are insured and employed. Most are college graduates," said AFL-CIO President John Sweeney in a conference call. "These are the people you would expect to have positive experiences with America's health care system...they're hurting."
The AFL-CIO and its community affiliate, Working America, sponsored the online Health Care for America Survey, taken by 26,419 people from Jan. 14 to March 3.
Mar 23 14:30
By RACHEL BECK
and
ERIN McCLAM
Associated Press Writers
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NEW YORK (AP) -- For months, Americans have been subjected to a sort of economic water torture -- a maddening drip of bad news about jobs, gas prices, sagging home values, creeping inflation, the slouching dollar and a stock market in bumpy descent.
Then came Bear Stearns. One of the five largest U.S. investment banks nearly collapsed in a single day before the government propped it up by backing emergency loans and a rival stepped in to buy it for a paltry $2 per share.
To the drumbeat of signs that seemed to foretell a traditional recession, this added a nightmarish specter -- an old-style run on the bank, customers clamoring to pull their cash, a stately Wall Street firm brought to its knees.
The combination has forced the economy to the forefront of the national conversation in a way it has not been since the go-go 1990s, and for entirely opposite reasons.
As economists and Wall Street types grope for historical perspective -- which is another way of saying a road map out of this mess -- Americans are nervously wondering about retirement savings, interest rates, jobs that had seemed safe.
They are surveying the economic landscape and asking: Just how bad is it?
They are peering over the edge and asking: How far down?
And the scariest part of all? No one can say for sure.
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Even before the crippling of Bear Stearns Cos., the U.S. economy was acting as a slowly tightening vise -- an interconnected web of factors combining to squeeze Americans from all sides.
Take Jaci Rae of Salinas, Calif. She runs a company, Luco Sport, that sells golf bags and accessories. The merchandise is made with foam, which is based on petroleum, so record oil prices have taken a heavy toll.
On the other end, her clients are feeling the pinch, too, and cutting back. Sales to retail clients are an eighth of what they were a year ago. So Rae had to cut five of her 20 employees loose.
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"If companies see a sluggish recovery, they won't be taking any steps to build their payrolls soon and will remain cautious in how they allocate capital." |
Now the company isn't buying products as far in advance. With gas prices running high, she waits for shipping companies to pick up products from her headquarters instead of having an employee drop them off.
She is nickel-and-diming expenses at home, too. She eats in every night, has stopped going on road trips to visit her family, dropped her satellite dish and canceled her monthly Blockbuster movie rental.
"I want to make sure I have enough money to feed my family," Rae says.
Signs of the pinch are showing up everywhere:
--By the end of 2007, 36 percent of consumers' disposable income went to food, energy and medical care, a bigger chunk of income than at any time since records were first kept in 1960, according to Merrill Lynch.
--People are treating themselves less often. The National Restaurant Association says 54 percent of restaurants reported declining traffic in January, and the government says eating at home increased last year for the first time since 2001.
--Financial planners say that more than ever, parents are calling for advice on how to deal with grown children who have moved back in with Mom and Dad after losing a job or just to save money.
--Less trash is being set on the curbs of Mesa, Ariz., where surging home foreclosures are leaving more houses empty. That means fewer homeowners paying the city $22.60 a month for pickup. And William Black, the city's solid-waste management director, says people aren't throwing out as many appliances and bulk items, like furniture. They're sticking with what they have.
On top of an economy that was already groaning under the weight of a downturn, Bear Stearns came down like an anvil.
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"The credit crunch means corporations can't borrow as easily, so they are delaying big projects, which cuts into the job market." |
It tied together so much of what's wrong with today's economy -- the housing crash, the credit crunch and a loss of confidence among investors and consumers alike.
Understanding how things got so bad means rewinding to the start of the housing boom. Wall Street and the banks made it far easier for people with shaky credit to get a mortgage -- known as a subprime loan.
Investors wanted a piece of the fast-growing mortgage pie, so there was plenty of money sloshing around the market to pay for the loans.
Financial firms sliced up the mortgages and sold them as complex investments, finding eager buyers among pension funds, hedge funds and more who were chasing higher returns and willing to overlook risks.
As long as housing prices went up, the strategy worked. When they began to crumble, so did financial stability.
The same people who made a financial stretch to buy their homes are now defaulting on the loans at alarming rates. Many are "upside down" on their loans, meaning they owe more on their mortgages than their homes are worth.
Nearly 9 million households now have upside-down mortgages, and for the first time ever, aggregate mortgage debt is bigger than the total value of homeowner equity -- bigger by $836 billion, according to research by Merrill Lynch.
The housing problem set off the dominoes: Surging defaults meant the mortgage-backed securities plunged in value. That dried up the money to fund new home loans, and lenders everywhere became tighter with credit.
Bear Stearns found itself in the cross hairs. Market rumors began to swirl about the size of its exposure to mortgage securities, whether it had ample reserves to cover potential losses. Clients and investors began to demand their money back.
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"If companies see a sluggish recovery, they won't be taking any steps to build their payrolls soon and will remain cautious in how they allocate capital." |
"This problem begins with the fact that we underwrote mortgages sloppily, which means no one really knows what those assets are worth," said Lyle Gramley, a former Federal Reserve governor and now an analyst with Stanford Financial Group. "That makes bankers very leery, and has resulted in a significant contraction in the availability of credit."
The credit crunch means corporations can't borrow as easily, so they are delaying big projects, which cuts into the job market. And many of the same companies were already smarting from the downturn in housing, which has made many Americans uneasy about their household wealth and caused them to scrimp on spending.
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The last time the U.S. economy tilted into recession was 2001. And it was an entirely different animal.
Investors bore the brunt of that downturn as the stock market shook off the excesses of the late-'90s technology boom. Encouraged by their government -- and fortified with tax rebates in their pockets -- Americans kept spending.
Perhaps most importantly, there was no reason for anyone to doubt the stability of the financial system. There was no credit crisis to speak of, and the housing boom had yet to begin.
This time around, no one has declared a recession just yet: By the generally accepted rule, that takes two consecutive quarters of shrinking economic activity. The economy came close to stalling late last year but eked out small growth.
But the lack of an official declaration makes the pain no less real.
"I think the current financial crisis looks to me like the worst one since we got into the Depression," says Richard Sylla, who teaches the history of financial institutions at New York University's Stern School of Business.
Which is not to say this time will be anywhere near as bad -- partly because, economists note, Federal Reserve Chairman Ben Bernanke is a student of the Depression and appears to be steering the Fed toward avoiding the mistakes of back then.
That may be why the Fed moved quickly to back up JPMorgan Chase & Co.'s lifeline loan to Bear Stearns when it neared collapse.
The Fed dusted off other Depression-era tools, too. It allowed securities dealers to borrow directly from the Fed, a privilege once restricted to commercial banks. And it announced it would lend up to $200 billion to investment banks in exchange for the banks' beaten-up mortgage-backed securities.
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One interesting difference: In the downturns between the '70s and today, baby boomers used their massive buying power to help spend the nation out of the slump. In the 1970s, they were too young. Today, they are focusing on retirement. |
The idea is to maintain confidence in the American banking system. If that fails -- if more Bear Stearns episodes emerge -- it could gum up the entire economy, historians note.
"No one would trust anybody else, no one would be willing to do business," said Charles Jones, a finance professor at Columbia Business School. "And if that happens, the economy would feel that right away. So the Fed is doing what it can."
Another key difference: Today, the United States is just one piece of a complex global economy. A century ago, an American financial crisis was America's problem. Today, emerging economies provide an extra layer of insulation.
"People are still going to eat in China and India. They're going to be buying clothes and cars and airplanes," says Robert A. Howell, a distinguished visiting professor of business administration at Dartmouth. "So I think it's a whole different ballgame."
A better comparison might be the economic downturn that gripped the United States in the early 1970s, a time now widely remembered for long lines at the pump. Today gas is plentiful, but summer drivers face the scary prospect of paying $4 a gallon.
And as David Rosenberg, chief North American economist for Merrill Lynch, pointed out in an analysis this week, the parallels to the 1970s go much deeper than just the shock of record oil prices, which tripled during the 1973-75 recession and have seen a similar rise in recent years.
Then as now, food prices rose along with energy. Then as now, declining home prices gave homeowners ulcers over equity. And the dollar, which held up fine in the 2001 recession, is falling now even more than it did in the early '70s -- 9 percent then on a trade-weighted basis, 14 percent in the last year, according to the Federal Reserve.
One other interesting difference: In the downturns between the '70s and today, the baby boomers used their massive buying power to help spend the nation out of the slump. In the 1970s, they were too young. Today, they are focusing on retirement.
"The mid-1970s is the best template," Rosenberg wrote, "if there is any."
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If the 1970s truly are a guide, there's a lot farther to fall.
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"Monica Nakamine, 37, took a higher-paying job at an L.A. architectural firm, but has been putting the difference in her earnings right into savings. These days she's dyeing her own hair, picking through sales racks when she shops and washing her dog herself, rather than getting him groomed." |
Back then, the Standard & Poor's 500 index fell 36 percent from its peak to its trough. Right now, the S&P 500 has only lost 15 percent from its record highs of October 2007.
Finding shelter from this downturn isn't as easy as you might think. So-called private label products -- no-name cereal or crackers usually far cheaper than brand names -- are less of a deal because of soaring commodity prices.
Nearly 90 percent of chief financial officers of global public companies don't see an economic recovery coming until 2009, according to a new survey by Duke University and CFO Magazine.
And that's more than just crystal-ball gazing: If companies see a sluggish recovery, they won't be taking any steps to build their payrolls soon and will remain cautious in how they allocate capital.
So what's the way out?
Already, the Fed has slashed interest rates. It has cut the closely watched federal funds rate, the overnight lending rate for banks, six times since September, from 5.25 percent to 2.25 percent -- two-thirds of the cut coming in the last two months alone.
But the Fed can't work alone. Upcoming tax rebates for millions of people and tax breaks for businesses may give a little relief, but economists think that something will have to be done soon to slow down the number of foreclosures, a cornerstone of the economy's woes.
"We can't have financial institutions not providing credit to the economy," said Eugene White, a professor of economics at Rutgers University. "We have to stop that if we want to avoid a deep recession."
Economists and market historians seem to agree that this is more than a typical, cyclical slump. And the X-factor that sets it apart -- determining how deep the wounds from the mortgage mess really are -- also makes it impossible to map the path of the downturn.
"Financial crises happen, but they always do blow over," Sylla says. "It's a question of how long."
So in the meantime, Americans like Monica Nakamine are planning for a long road ahead.
The 37-year-old took a higher-paying job at a Los Angeles architectural firm, but has been putting the difference in her earnings right into savings. These days she's dyeing her own hair, picking through sales racks when she shops and washing her dog herself, rather than getting him groomed.
And she's considering some drastic actions in case things get worse -- like moving to a cheaper city such as Austin, Texas, and getting rid of her gas-guzzling sport utility vehicle for a hybrid sedan.
"Certainly I don't want it to get any worse," Nakamine said, "but I know it can."
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