THE ENGINE REVVING HOUSTON'S ECONOMY
November 14, 2014
Op-ed: Lack of Skilled Workers Threatens Houston Energy and Construction Boom
Houston has long served as the epicenter of the U.S. energy industry, and the recent resurgence in these fields is leading to new opportunities for economic growth and creating tens of thousands of well-paying jobs.
Normally, the flood of new jobs is welcome news in every community, particularly as the United States emerges from the economic downturn. However, even as Houston’s economy grows, the city – and a number of U.S. cities, for that matter – faces the challenge of hiring a workforce that has the technical skills and training to fill these open positions.
This gap is creating an economic paradox that threatens future growth and prosperity. Communities are not providing enough training to the workforce so that they have the right skills to do the job and fill this gap. As I noted in October, JPMorgan Chase & Co. has launched a five-year, $250 million program called “New Skills at Work” to study nine U.S. cities and four European countries so we can properly identify this disconnect as well as use data from these locations to drive local solutions.
Last month, we reported that New York City had more than 25,000 middle-skills jobs in five core health care areas and another 8,100 technology jobs available between July 2013 and June 2014. Yet, there remains a lack of skilled workers to fill these positions.
Our latest research shows that Houston is experiencing a similar challenge. Most notably, the petrochemical and construction boom in Houston is being threatened by the lack of a skilled workforce to fill current job openings.
In Houston, petrochemical and industrial and commercial construction sectors employed more than 258,000 Houston workers in 2013. Those sectors are expected to create nearly 19,000 jobs annually through 2017 – almost 80,000 jobs. These jobs range from tractor-trailer truck drivers and plumbers to construction managers and inspectors. These positions can lead to significant upward mobility as entry level positions pay about $11 an hour and dramatically increase to as much as $51 an hour for management-level jobs.
While that is good news for job seekers, more than 855,000 residents aged 25 and older do not have a high school diploma as of 2013. The report also notes 47 percent of the area’s Latino residents – one of the largest and fast growing populations – do not have a high school diploma. Many of these available jobs in Houston require a high school degree and some postsecondary technical education and training, but not a college degree. However, the vast majority of these jobs, 90 percent in the petrochemical field and 88 percent in the commercial and industrial construction industry, require at least one year of experience and, in some cases, five years.
We cannot address this shortfall overnight, but Houston’s leaders have already taken several important steps to help by working closely with employers, educators and community organizations.
Earlier this year, the Greater Houston Partnership launched UpSkill Houston – a collaborative, multiyear effort that brings together the business community, educators and social service organizations to help address this problem. JPMorgan Chase has contributed $5 million over five years to Houston’s workforce training efforts as well as culled the data that will help develop workforce programs that match employer demand.
These efforts are already bearing fruit. Omar Sanchez, a 35-year-old machinist in Houston, recently enrolled in a training program at Lone Star Community College to advance his skills and career. Once he received his new certification, he was quickly promoted to a lead machinist role and he now plans to pursue a collegiate degree in engineering.
That has also prompted his employer, Texas Advanced Manufacturing Solutions, which makes parts for the petrochemical industry, to collaborate with Lone Star to help 50 of its 125 employees receive additional middle-skills training.
To further grow Houston’s skilled workforce in the short term, employers can develop internship programs, offer on-the-job training and collaborate with community groups to build the pipeline of workers with the right experience. Community groups should help job seekers develop basic skills such as financial literacy and also offer entry-level training as a steppingstone to more advanced positions.
Over the longer term, Houston employers should consider relationships with colleges such as Lone Star and high schools so students develop the skills for in-demand jobs. Additionally, education programs should be flexible enough to enable students to participate in apprenticeships and other on-site training opportunities that will further develop a robust stable of workers well positioned for the jobs available.
With these goals and solutions in mind, we can make sustained economic growth a reality in Houston.