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Reports of Increasing Construction Labor Shortages

November 1, 2018


The Bureau of Labor Statistics (BLS) recently published an Employment Situation Summary which highlighted the growing shortage of construction employees.  A month prior, the Autodesk and the Associated General Contractors of America (AGC) issued findings of an industry-wide survey that found an overwhelming majority of construction firms are having a hard time finding qualified workers. These reports both support the fact that workforce shortages are on the increase and are affecting the industry’s economic growth.

In the BLS summary, the employment situation by industry in September 2018 shows that construction employment continued to trend up in September (+23,000) and has added 315,000 jobs over the past 12 months. Similarly, the Autodesk/AGC report found a widespread shortage of construction professionals with more than 80 percent of contractors surveyed unable to fill jobs. This report also noted that the “Nationwide Shortage of Skilled Workers Has Raised the Cost of Construction and Delayed Project Schedules, Putting Broader Economic Growth at Risk.”

As the construction labor shortage continues to grow in general, so does the competition for employees between public and private projects. One of the advantages of public projects is that employers can typically offer fringe benefits which can serve to attract and retain employees.

Study Identifies Drivers To Millennial’s Retirement Savings

October 22, 2018


Financial experts are concerned that Americans are not saving enough for retirement. Millennials are no exception, as they represent a vast majority of those who are not saving for their post-career lives. In a recent report by Navient, Money Under 35, a glimpse is provided at how Millennials look at retirement and what was shown to correlate with increased savings rates.

Money Under 35 is a national study that looked at the financial health of young Americans aged 22-35 and found that just 3 in 10 young Americans are saving and nearly 4 in 10 believe that saving for retirement can wait. Of those saving, the average amount saved for retirement in 2017 was a total of $32,818, a decrease from the prior year’s total of $37,638.

It appears that the driver behind the belief that retirement saving can wait is that young people are facing competing demands for their financial resources and making decisions between paying off debt and building their savings.

However, the study also found that the presence of a 401(k) plan correlates strongly with increased savings rates. Millennials whose employers offered a 401(k) match program were almost twice as likely to save for retirement than those whose employers did not, 61% and 31% respectively. Also, the young adults who were offered such a program have accumulated nearly twice the average savings, $32,851 compared with $18,879.

While young adults are confronted with competing financial goals, employers who offer 401(k) match programs do motivate Millennials to save for retirement which leads to improved financial health.

July 2018 Construction Spending

September 6, 2018


The U.S. Census Bureau announced construction spending for July 2018 was up at a seasonally adjusted annual rate of $1,315.4 billion, 0.1 percent above the revised estimate of $1,314.2 billion. During the first seven months of this year, construction spending amounted to $740.5 billion, 5.2 percent above the $703.7 billion for the same period in 2017.

While private construction spending was $1,010.9 billion, 0.1 percent below the revised June estimate of $1,011.9 billion; public construction spending was $304.5 billion which is up 0.7 percent above last month’s revised estimates of $302.3 billion. Public construction spending was also up 8.3% from this same time last year.

Two of the main contributors to the public construction spending growth in July come from educational construction, 2.1 percent above the revised June estimate of $70.1 billion, and highway construction, 0.4 percent above the revised June estimate of $93.8 billion.

More information may be found at:

https://www.census.gov/construction/c30/pdf/release.pdf

June 2018 Construction Spending

August 13, 2018


The U.S. Census Bureau announced construction spending for June 2018 which was at a seasonally adjusted annual rate of $1,317.2 billion, 1.1 percent below the revised May estimate of $1,332.2 billion.

Despite the drop from May to June, June was 6.1 percent above the June 2017 estimate of $1,241.3 billion. Additionally, during the first six months of this year, construction spending amounted to $619.9 billion, 5.1 percent above the $589.6 billion for the same period in 2017.

While private construction spending was $1,019.8 billion, 0.4 below the revised May estimate of $1,023.9 billion; public construction spending was $297.4 billion, 3.5 percent below the revised May estimate of $308.3 billion. However, Total Public Construction is up 4.9% over June 2017. A couple of contributors to this growth are Transportation up 11.9%, and Highway & Streets up 6.3%.

More information may be found at:

https://www.census.gov/construction/c30/pdf/release.pdf

Executive Order Focuses on Job Creation

July 30, 2018


Last week President Trump issued an Executive Order establishing the President’s National Council for the American Worker. The Order looks to foster an environment of lifelong learning and skills-based training, and cultivate a demand-driven approach to workforce development. The Order is intended to show a national commitment to job creation over the next five years.

Under the Order, more than 15 companies and associations have signed a pledge to train and educate 3.8 million American students and workers for in-demand job skills. The companies committed to expanding apprenticeships, increasing on-the-job training, and provide people with opportunities to develop skills with the goal of being hired.

The Order also establishes the President’s National Council for the American Worker (Council) which is co-chaired by the Secretary of Commerce, the Secretary of Labor, the Assistant to the President for Domestic Policy, and the Advisor to the President overseeing the Office of Economic Initiatives (Co-Chairs). The Co-Chairs will work to develop ongoing recommendations for the President on policy and strategy related to the American workforce. Within the first 180 days of this Order, the Council is expected to help shape a national approach to train Americans for the skills they require to fill open jobs now and in the future.

Additionally, the Order created the American Workforce Policy Advisory Board (Board) that will work to bring together business executives and educators. In particular, the Board is tasked with encouraging the private sector and educational institutions to combat the skills crisis by investing in and increasing demand-driven education, training, and re-training, including through apprenticeships and work-based learning opportunities.

U.S. Department of Labor Announces Change to SCA Fringe Rate

July 18, 2018


The prevailing health & welfare fringe benefits issued under the McNamara-O’Hara Service Contract Act (SCA) awarded before January 1st, 2018 with Option Years on or after August 1st, 2018 will utilize the new fringe rate of $4.48.

Additional SCA Health & Welfare Fringe Benefit Rate Information

All service contracts awarded on or after January 1st, 2018, that contain paid sick leave (EO 13706) will utilize the newly reduced $4.18 SCA health & welfare benefit rate. The DOL memorandum is posted on the Wage and Hour Division (WHD) website.

For more information: Click Here To Read The Full Memo

State Takes Action to Pass Minimum Wage and Paid Family & Medical Leave

July 3, 2018


On June 28, 2018, Governor Charles Baker of Massachusetts signed into law “An Act Relative to Minimum Wage, Paid Family Medical Leave and the Sales Tax Holiday,” sometimes called the “grand bargain” law.  The Massachusetts legislature had overwhelmingly passed the bill which will provide a $15 minimum wage and enhance the State’s Paid Family and Medical Leave benefit. While there’s been little progress at the federal level, Massachusetts has taken action to advance employment-related legislation.

Under the new law the Massachusetts minimum wage will gradually increase from the current $11 per hour to $15 per hour by 2023. Additionally, the bill includes a phase-out over five years of the time-and-a-half premium pay requirement for retail workers working on Sundays and holidays. The only other state currently with plans for a minimum wage as high as $15 is California whose plan is to be implemented by 2022.

The bill also contains provisions relating to family and medical leave. Over a 3-year phase-in period, the Paid Family and Medical Leave Law would provide Massachusetts employees to 12 weeks of paid family leave, and 20 weeks of paid medical leave for a worker’s serious health condition.  These provisions will apply to all employers with one or more employees working in Massachusetts. Built-in job protections will allow paid leave to be available to eligible new employees without any hours worked or service time requirements.

The passing of this bill makes Massachusetts one of the most generous paid family leave states in the country.

Proposed Plan to Merge Education and Labor Departments

July 2, 2018


Late last week the White House released a comprehensive plan to reform and reorganize Executive Branch departments and agencies.  The document, the Delivering Government Solutions in the 21st  Century – Reform Plan and Reorganization Recommendations, prepared by OMB, includes a proposal to merge the Departments of Education (ED) and Labor (DOL) into a single Cabinet agency, the Department of Education and the Workforce (DEW).

The goal of merging ED and DOL is to allow the Federal Government to address the educational and skill needs of students and workers by eliminating duplication of effort and maximizing the effectiveness of skill-building efforts.

The proposed plan looks to merge all of the existing DOL and ED programs into a single department, DEW, with four main sub-agencies, focused on K-12, Higher Education/Workforce Development, Enforcement, and Research/Evaluation/Administration. In the new DEW, all of these agencies would report to one senior official to enhance the efficiency and coordination of enforcement and compliance assistance efforts.

The sub-agency of Enforcement would include worker protection agencies from DOL that are responsible for enforcing statutes relating to workers’ pay, safety, benefits, and other protections, as well as Federal workers’ compensation programs. The Agency would also include ED’s Office of Civil Rights, which is responsible for ensuring equal access to education through enforcement of civil rights in the nation’s K-12 school and higher education institutions.

The next step involves OMB and agencies beginning a dialogue with Congress over the summer to prioritize and refine the proposals. The full details of the plan can be found at: https://www.whitehouse.gov/wp-content/uploads/2018/06/Government-Reform-and-Reorg-Plan.pdf 

Study Confirms Concern About Retirement

May 16, 2018


According to new data from Northwestern Mutual’s annual Planning & Progress Study, 78% of working Americans feel underprepared for the financial realities of retirement which seems to be driven by dramatic shortfalls in savings combined with declining confidence in Social Security. As a result, more Americans anticipate retiring at 70 years or older (38%) than in the more traditional 65-69 age range (33%).

Key findings from the study include:

  • Two-thirds of working Americans believe there is some likelihood of outliving retirement savings while nearly eight in 10 people are “extremely” or “somewhat” concerned about affording a comfortable retirement.
  • One in five or 21% of workers have no retirement savings at all
  • One in three Baby Boomers (33%), the generation closest to retirement age, only have between $0-$25,000 in retirement savings
  • Three-quarters of Americans believe it is “not at all likely” (24%) or only “somewhat likely” (51%) that Social Security will be available when they retire
  • Nearly half (46%) of adults have taken no steps to prepare for the likelihood that they could

Findings confirm that working Americans are concerned about their financial security in retirement which is a driver to why people are planning to work longer.

These results are part of an initial set of findings from the 2018 Study commissioned by Northwestern Mutual to explores Americans’ attitudes and behaviors toward money, financial decision making, and the broader landscape issues impacting long-term financial security.

https://news.northwesternmutual.com/2018-05-08-1-In-3-Americans-Have-Less-Than-5-000-In-Retirement-Savings

Approach to Infrastructure Overhaul

May 1, 2018


Since March, there has been constant talk about a gradual approach to achieving President Trump’s infrastructure overhaul plan. When the White House officials initially unveiled the $200 billion infrastructure plan they did not designate the source of funding for the proposal. Many envisioned that the overhaul would come as one giant package, but now it seems that Congress will be taking a piecemeal approach, breaking the plan into a series of measures.  

First to announce this piecemeal approach was Speaker Paul Ryan at an event in Georgia back on March 12th where he affirmed the House Republicans intent on overhauling infrastructure this year through a series of multiple bills. Ryan said that the infrastructure plan would be tackled as five or six different bills which are more realistic in the upcoming midterm election year.

Just a few weeks later, President Trump was speaking to local workers in Ohio about his infrastructure plan and noted that the plan “can be passed in one bill, or in a series of measures.” Trump acknowledged that Congress might not have the eagerness for a giant overhaul of the country’s infrastructure but stated that “what matters, is that we get the job done.”

Further reinforcement came at the end of March when White House Economist Kevin Hassett spoke about the approach to Trump’s infrastructure plan. Hassett acknowledged that Congress might indeed want to tackle things little by little, an approach that is doable, but it will also mean that every time Congress legislates, they will be looked upon for achieving infrastructural progress even in the smallest of forms.