Episode Transcript
Kirk: Hello. Welcome everyone to The Construction User 2.0. Today's guest is Sean McGarvey, the President of North America's Building Trades Unions. From Glaziers Local 252 to being the president of NABTU, our guest has seemingly seen it all, but he continues to strive and improve our industry.
Championing women in the workforce, transitioning veterans into the trades, bolstering apprenticeship programs, strengthening pensions, and managing programs across the entirety of the industry, all of this while being a father, husband, and grandfather.
A monumental presence in Union Construction for over 40 years focused on training in builders of the future while fighting for current union members across the continent, the leader of NABTU and with three million strong, welcome, Sean McGarvey.
Sean: Thank you. It's great to be here.
Kirk: I like to start with a ridiculous silly question. What's the last song you got stuck in your head, like the song that you just couldn't break free of?
Sean: Let me think about that for a second. I would probably say Thunder Rode by Bruce Springsteen.
Kirk: Very good answer. Not an unpleasant song to have stuck in your head, really. You could do much worse. One of the things that we hear a lot about right now, whether it's in the news, whether it's about construction or not construction, it's about labor, the labor shortage, and the problem of finding and retaining good talent. Being the president of NABTU, labor is a big part of it. I was wondering what you guys had been experiencing and seeing with the labor shortage, as it is so called.
Sean: I actually just had some conversation with some of my team about this today because one of the misconceptions is, in the construction industry, single family housing makes up more than 50% of the industry when it comes to people engaged in construction.
Going back to the Great Recession, the depression of the construction industry of 2008, 2009, 2010, 2011, 2012, where housing practically shut down, a lot of that workforce left and never evolved into the higher levels of construction in commercial, institutional, and heavy industrial. They still are suffering quite a bit in that portion of the industry because it's the bottom rung of the industry. It's the lowest paid, it's the worst conditions, and it's rife with abuses of the workforce. A lot of the workforce doesn't come domestically.
When you get to the institutional, commercial, heavy industrial portion, we are not seeing massive problems finding enough skilled workforce today. That does not mean that we are not concerned and working towards making sure we're as prepared as we can be when some of this investment that the federal government and the private economy are making start to make real demands on huge numbers of skilled craft professionals.
A lot of time is spent by each institution that's affiliated with NABTU on their own plans and programs on how to recruit and maintain a workforce to meet the demands of our contractor partners and our customers. They vary across crafts, across regions, how they're approaching it. It's a difficult balance because you project what the needs are in a local geographical area when it comes to a particular craft.
The only thing that's predictable about the construction market in the United States and Canada is it's unpredictable. You see major projects get off the ground, get started, and then all of a sudden, there's a situation where a project stops. I know that there's a major project that just shut down in Vegas this week. Lots of different reasons for stuff like that, a lot of it has to do with financing.
It's hard to predict exactly what the needs are going to be. Our unions in NABTU across different geographies are giving a real effort to make sure that they take advantage of this opportunity, support the contractor partners, and provide what the people that are making these capital expenditures, whether it's federal, state, and local government or private industry, to give them what they want and what they need, which is an abundant, safe, productive, professional craft workforce.
Kirk: Those are some really cool and fascinating stuff in there. I appreciate all that. So many of the people I've talked to have said exactly what you said. Yeah, I started when I was 16 or 17 building houses over the summer. They get started in that realm before transitioning up. I guess I'd never really thought of the great housing recession where everything shut down, would certainly put a bubble in the pipeline, not necessarily at the higher levels, but at that entry level thing.
Sean: It did for us in NABTU and our affiliate unions also because we went from a situation where we had phenomenal employment and opportunity for our contractors and our members, to practically overnight massive unemployment. I can remember two states that always stick in my mind are Nevada and Michigan, where we had 50% unemployment across the crafts in those two states. When you have that level of unemployment, certainly you're not feeding the pipeline to bring more people in.
You lose a couple of years during that process. Eventually, that catches up to you, where there should have been 100, 150, or 200 more people in your union who are now well into their journeyperson status that never got there because they weren't taken in, because it just wasn't work for them. It wasn’t work for the existing membership. That catches up with us, too, but more predominant in the single family housing sector.
Kirk: Obviously, we're talking about everything from 2008. Obviously, the housing boom, that housing collapse of 2008 was specifically about people building things. How did Covid and and the shutdown affect the construction heavily? Are we seeing results to that as well?
Sean: Yeah. When it comes to the intake side, the uncertainty lasted a much shorter period of time than the Great Recession. We went on March 13th, 2020 from pretty much full employment to 60% unemployment over a weekend. But over the next three or four months, we put the vast, vast majority of those people back to work as we went state to state to get certified is essential to keep the infrastructure moving in this country, to do everything that our members did, heroically, by the way, from building temporary fuel hospitals, to temporary morgues, to keeping the power on, refueling nuclear plants, doing the maintenance to keep hospitals online and converting regular hospital rooms to ICU units, to get all the prerequisite piping that was needed to keep people alive.
Like I've said many, many times, quite honestly—I guess it's almost 114-year history, if I get the numbers right; it's the 115-year history of NABTU—it's our proudest moment. Our members did that. Our members went out there. Our members were just like everybody else. We weren't quite sure what was going on. We weren't sure what happens if we bring this disease into our house.
They wound up sleeping in their cars, they wound up sleeping in their garages. It was amazing, the work that they did. They put the country first. Like I said, it's as proud of a moment as the building trades have had in its history. Those members that went out there across the United States and across Canada did that every day.
Kirk: It was a time of great uncertainty for everyone. I don't think anyone felt real confident in the status quo there for a while. Obviously, there are 14 unions in NABTU, and that makes it 14 different answers. Obviously, you already said the only thing that is certain is the uncertainty. How is the pipeline of work, the apprenticeships, and the labor supply now?
Sean: The pipeline of work looks tremendous. Of course, we've got particularly the NMA and TAUC. We've got a tremendous amount of battery plants that are either under construction or getting ready to start construction. We are getting ready on starting on the first couple of fab plants that are massive projects in Ohio, in New York, out in Texas, New Mexico, Arizona, and Washington state.
We've got small modular reactors. We just had our first technologies that applied for NRC approval. We've gotten it. We have hydrogen hubs that the DOE is going to shortlist down to probably 10–13 and make awards in June. All these projects in all those different technologies are all multibillion dollar projects, and they require at least 1500 quality skilled crafts people for whether it's a small modular reactor, and they really don't know because we haven't built one yet the exact workforce numbers that we're going to have.
We have experience building these fabs. You're talking about 7000 people we're going to have at the Intel site in Columbus. The same thing with the Micron project up in Syracuse, New York, 7000–8000 people there. There are two projects with almost 20,000 skilled craft professionals on.
We're working hard. We've built partnerships over the years through our apprenticeship readiness programs with national groups like YouthBuild and Urban League to target populations that haven't had as many opportunities to get in the unionized industry. We've recently, within the last two weeks, got a $20 million grant in a partnership with our trade futures, 501(c)(3), who's handling our apprenticeship readiness programs and other programs to make the construction industry more attractive to groups that haven't had always an easy time accessing.
We're partnering with Urban League. We're going to start in four states and expand out through that grant to target the populations that we want to recruit, where we have the expertise on the training side through our magnificent training infrastructure that each of our unions has across these United States, 1600 training centers in excess of spending over $2 billion a year of our money. Then partnering with somebody like the Urban League, who does the wraparound services because things have to be different.
We've spent a lot of effort, a lot of time, and are having success with recruiting more women into the industry. They require different kinds of support to be in the construction industry and more importantly to stay in the construction industry.
We are doing two pilot programs on childcare through our trade futures operation, one in Milwaukee and one in New York City. One of the real problems we have with men is men are responsible in many households for lots of the duties required for the family, but predominantly, it's still women. In order to get people into the construction industry or to keep them in the construction industry when they decide to start a family, childcare is a gigantic issue. It's a cost issue, it's a quality issue, and it's an access issue.
It got worse from the pandemic because many, many childcare facilities went offline. Then we have a particular problem when it comes to childcare in the construction industry. Not many childcare providers open their doors at 4:00 AM, 4:15 AM, or 4:30 AM. Not many of them keep them open till 7:00 PM, 7:30 PM, or 8:00 PM if necessary because with the seasons, our industry likes to start early to beat the heat, keep people safe, but then sometimes you got trucks to unload, you got a tower crane you're working with, you got a concrete pour going on. You have to be there.
I got to go pick up my kids, I got to go. That can't happen. You got to get that concrete set and finished. That requires a completely different look at how childcare is delivered for the people. We're trying to target 50-plus percent of the population of women in the United States in the construction industry.
We think we've done a good job of increasing the number of women in our trades over the last 10 years. We've doubled the number from 2% to 4%. But that's the bad news, it's only up to 4%. We need to do much, much more and get that number much, much higher. There's really a group of people that make fantastic craftspeople that are dedicated to their work. They're diligent, they're smart, and they're strong.
There are all kinds of accommodations outside the job on a daily basis that we have to make. If we're really serious about this and there are all kinds of accommodations, quite honestly, on the job site that construction owners and the people that are putting up capitol that I can speak for NABTU. We're going to push much, much harder on what we think needs to be done, the extra dollars that some are not used to spending that need to be spent. If people want to complain about access to enough skilled craftspeople to make their investment a going concern, there are things that they can do and they need to do to make their job sites more accommodating, and we're going to press on that.
Kirk: You touched on a couple of things in there that I wanted to ask about. We have over a hundred mega projects, over a billion dollar projects. Like you said, some are 7000 people, some we don't quite know, but these aren't barn raising. This isn't a weekend job. These are careers. This is something that these men and women are going to be on for months, years, decades. This is something that's going to continue to need ongoing, non temporary type of maintenance, correct?
Sean: Absolutely. A huge part of what helps us when the capital spent is not out there is the ability to put our people and our contractors to work and maintain the infrastructure that we built. When it comes to some of these new technologies and the rapid change in the technology requires constant changeovers to keep up with the technology changes, think of battery plants.
We know what we're doing now. We don't know what we're going to do three years from now. As quickly as the technology moves, it's incredible. Not only building them, but maintaining them. We're going to need to grow width-wise and we need to grow height-wise when it comes to the amount of people that we have in the unionized construction industry available to take care of all that infrastructure.
Kirk: Let me not necessarily change gears, but segue to a few weeks ago. You hear this all the time about how unions are anti-competitive or that President Biden's thing last year, but with the executive order on PLAs is anti-competitive to the small business, the non-union shops. But as I take a look, I don't think there's anything non-competitive about the union houses that I've interacted with.
Why union construction? Why is union construction the way to go in a world where you can get these non-union shops versus hiring unions? Talk to me a little bit about the competitive and why union construction should be considered by the owners.
Sean: A great leader in our movement, he didn't tell me directly, but I'm told he used us in a meeting with a giant EPC contractor that we don't particularly have a real relationship with. They posed the same question. He had a great answer that I think really sums it up. He says, if you want to go to McDonald's to get a Big Mac in LA and you're from New York, your expectation is that a Big Mac is going to taste the same in LA as it does in New York.
In the unionized construction industry, the way our training is delivered, is consistent across the United States, and for that matter, across North America. You know what you are getting. You can count on the productivity, the skill level of people who have gone through our training programs and our upgrading programs, and that brings surety and predictability when you're spending in excess of a billion or billions of dollars.
These are people that a lot of them are in publicly-traded companies. If things don't go well, that senior leadership is on the hook for that. They better be able to answer the questions when they get in front of that board of directors about why a project went sideways. The answer to it can't be that we tried to shave points on the quality of the people that we hired to do the work. The answer should be that if they were in an acquisition phase, they would hire Goldman Sachs, JP Morgan, or one of the top banks to help them with that.
If they were in a litigation situation, they would hire the top litigation firms in the country. When they're in a capital spend or capital construction, they certainly should hire the best professional contractors with the prerequisite workforce with the skills necessary for that investment to be a smart investment and to pay dividends, not only to the board of directors, but the stockholders. They're the kinds of questions that they have to answer.
On top of that, when they go to finance projects, some of these mega mega projects, the banks that are lending that money ask some of those same questions. It better not be, if the thing goes sideways, that you made a decision of how you're going to save a few bucks by hiring a less skilled workforce. I love the saying that I think it's still the saying of TAUC, the poor taste of quality. It's their tagline. It's true.
I think we're in good position because of the forefathers from the contractors and the unions for the last 100 years that have built up our training infrastructure, and put us in a position where we can produce the people with the skill sets that are needed in this evolving, technologically-efficient construction market that can hit the job running. We can train up to specific, and we're doing a lot of this now to the specific needs of the owners with these technologies, bring them right into our training centers, and do that training.
Nobody else has that infrastructure. If you don't at least consider us, you would not be doing your due diligence. I wouldn't want to be on the hook if I was somebody that made this decision. If it all goes bad, I have to answer the questions of why the preeminent group of contractors and craft professionals weren't even considered when you made a decision on labor strategy.
Kirk: I've asked that question a lot over the last year-and-a-half that I've been here and to people of all levels, from owner or clients. That is probably one of my favorite answers. That's solid. It's the Big Mac. You want consistency, but you also need to know you're getting your best. I like that.
Wrapping up, I mentioned a second ago the infrastructure bill and as well as NABTU was involved and instrumental in the executive order for PLAs and other things. What's next? You have all these really big wins, but those are right behind us. What's right around the corner?
Sean: I think what's really the most important things that we're working on that are next is getting National Apprenticeship Act done, protecting registered apprenticeship, all the things we talked about gives you ability to provide the skilled craft professionals, and something that almost everybody in the industry can agree on is permitting reform.
When people think about the term permitting reform, they always think you're talking about energy. Yes, it affects energy, but it affects every aspect of the construction industry. In all the things I mentioned earlier, you notice I never mentioned the Bipartisan Infrastructure Act to that $1.2 trillion. All these other things were outside of that. It's just as hard to permit a bridge as it is to permit a pipeline.
These things have a dramatic cost escalation effect on infrastructure and a financing effect over time, where costs are driven up as you're waiting to get all the ducks in a row from federal, state, local bodies, who are all involved in this process. This arcane process drives up the cost of construction, sometimes at the end of the day, and we see it all the time. It makes the project cost not sustainable and they abandon the project. That needs to be dealt with.
I think there's a good chance of confluence, be the administration understands it and supports it. I don't care if it's offshore wind, solar, onshore wind, or any of the renewables, small modular reactors, nuclear that has no greenhouse gas emissions and is baseload generation that you can count on no matter what the weather is. All those things are susceptible to the permitting process.
I think enough people in the Congress, both Democrats and Republicans, and in the administration, recognize that if we're ever going to really benefit the most that we possibly can as a country from the investments that we made streamlining and not equivocating on our responsibility to protect this environment, in this global climate change that we're all dealing with, making sure that we're not shaving any points at all on that end of it, but making it reasonable, predictable, that here's the start and here's the finish. If you do all the things you're supposed to do, you meet all the requirements, you should get issued a permit so you can move forward with capital spend.
I'm keeping my fingers crossed. We're working hard at it with all the parties. There were some bills introduced last session in the Senate by Senator Manchin. The Republican House just put out their bill. They're more wishlist than just permitting reform, but it's a start.
There's a consensus around the permitting reform. That's a really, really important piece or will be leaving hundreds of billions of dollars that have been appropriated for lots of this infrastructure, the inflation act through tax credits, and other things that will never be used because the projects weren't viable because of the permitting process they had to go through. We have to get that right.
Kirk: That is a solid future goal that we need to fix because that changes everything. Mr. McGarvey, thank you so much for your time. Is there anything else you want to just add or say that we should be working on changing, fixing? How do we move union construction?
Sean: We have such a great relationship with TAUC. We're doing more and more closer collaboration on lots of issues, these and others, to try to find ways to partner and advance the cause of union construction. One thing that I said to my assembly last year, getting an infrastructure bill, now chips bill and inflation act bill. We're talking about, all in all, somewhere in the neighborhood of $4 trillion worth of construction.
At our conference this year, the theme of this conference is the infrastructure generation because the people that we need to recruit, the people that we need to train, and the people we need to deploy, when they look back 10, 20, 25, 30 years from now, it'll be these acts of Congress in this administration with the support of groups like TAUC and NABTU to help get them across the finish line, these investments that created this gigantic not a pathway, but a runway to the middle class through the organized construction industry.
We need to not screw it up. We need to figure out new ways to work together. We need to figure out ways to accommodate different points of view. We need to be understanding of each other. And we need to create win-win-wins, which we're good at doing, but we need to do more of it. I'm excited about where we're at. I'm excited about where we're going. I'm excited about our relationship with TAUC. The sky's the limit for the infrastructure generation. It's about to on-board with all of this.
Kirk: I agree. Thank you for bringing up the NABTU Leg Conference. We will absolutely be there. We were just talking about it earlier in a meeting today about how excited we are, what a great event it was last year, what we're excited to see what happens this year, and what crazy surprises there will be. If you want to wink at me and no one else is listening, I promise. Anything people can be excited to hear about, any surprise guests or people showing up at NABTU's Leg Conference?
Sean: I think people will be very pleased. We'll have some old friends, we'll have some new friends. We'll show a tremendous respect to a friend who has been a friend and supporter of the unionized construction industry for his or her whole career. It'll be an exciting couple of days, and we'll get our business done up on the hill together, shoulder to shoulder with our contractor partners, moving National Apprenticeship back and moving permitting reform.
I think we'll also do our day of service the day before the conference starts at some of the places around this town. I'm so proud of our members who come into town, get a little downtime, and not heading off to a golf course or sightseeing, but they're actually bringing their work boots and helping us show the people in this town, the policymakers, and the residents that we're not takers, we're givers too in the building trades. It'll be a fun three days, I think.
Kirk: I'm excited to be there again this year. Again, thank you so much for your time today. We look forward to seeing you again at NABTU Leg Conference, April 25th of this year. It's just next month. Awesome. The NABTU Leg Conference is on April 24th, 25th, and 26th of this year. I'm looking forward to it. Thank you so much for your time.
Sean: You too. Thanks and be safe out there.
