Thursday, July 28, 2016

The Infrastructure Labor Market

By Mark Knold, Supervising Economist, and Lecia Parks Langston, Senior Economist

The labor force is made up of people. People vary in every conceivable way. One person is artistic while another can only draw stick people. One person might be able to disassemble and reassemble a car engine while another might not know what an alternator is. We are different. We have different aptitudes and abilities.

Parallel to this variability, jobs are different. High levels of education do make it possible to work in high-skill occupations that return high incomes. But not everyone is cut out for higher education or has the means to obtain higher education. Therefore, they might end up in “lesser” or “unimportant” jobs.

But is that accurate? Are their job options inferior and unimportant? A recent Brookings Institution report brings to light a segment of the economy that is highly important yet is dependent upon the labor force that may not be built for, have the economic means, or desire to attain a college degree or higher.



Brookings identifies a niche they call the infrastructure economy. As Brookings notes, “Infrastructure helps facilitate the exchange of information, drive production, and deliver resources, spanning multiple sectors of the economy and serving as a foundation to long-term growth.” It goes further to note that “Infrastructure jobs depend on a steady stream of talent to construct, operate, design, and govern the country’s major physical assets.”

Brookings also documents why these infrastructure jobs can appeal to the individual. “Infrastructure occupations also boast competitive wages with relatively low barriers to entry, frequently paying up to 30 percent more to workers with a high school diploma or less compared to those in all other occupations. Plumbers, truck mechanics, and power line installers are among the numerous infrastructure occupations that fall into this category, which tend to emphasize on-the-job training rather than higher levels of formal education.”

Brookings identified 95 occupations that support the infrastructure foundation. Their work was well founded and designed. This intrigued us to develop a profile of said infrastructure configuration for the Utah economy. We could not replicate the Brookings work in terms of finalizing upon infrastructure industries, but we could place our focus instead upon all infrastructure occupations.

Infrastructure occupations do not have to be found in only infrastructure industries. A helicopter pilot, an infrastructure occupation, may fly a medical helicopter for a hospital, even though said hospital is not categorized as an infrastructure industry.

What is important is that there are occupations that Brookings has identified as key occupations that help to keep the economy operating, growing, designed, and governed. And a practical appeal is that many of these jobs offer low barriers to entry while supplying competitive wages.

Across the nation, these occupations number 11.9 million, or 8.8 percent of all occupational employment. In Utah, these jobs number around 121,400, also 8.8 percent of all occupational employment. Again, the appeal of these jobs is not just that they fundamentally support so many other jobs and industries in the economy, but that these jobs don’t require a high level of education or formalized training for entry. Oftentimes these occupations emphasize only on-the-job training. Yet, these jobs pay on average 22 percent higher in Utah than other occupations that are willing to accept only a high school diploma or less.

Utah does have its unique structuring across its different geographic regions, and this will include the possibility of a different profile of the infrastructure economy in each local region. The following is an infrastructure profile for the Southwest Utah region.

Southwest Utah 

The southwest corner of Utah is home to approximately 7,100 infrastructure jobs, about 9 percent of total employment. Infrastructure employment plays an important role in both Washington County and the other counties of Southwest Utah (Beaver, Garfield, Iron and Kane counties). However, while Washington County accounts for two-thirds of these infrastructure jobs, these jobs play a more important role in the smaller counties than in Washington County itself.

The location quotient for infrastructure occupations in Washington County measures 0.9 compared to a location quotient of 1.0 for the rest of Southwest Utah. Location quotients quantify regional concentration of this occupational group compared to the national average. In Washington County, infrastructure jobs account for a 10-percent smaller share of total jobs than the United States. In contrast, in the remainder of Southwest Utah, infrastructure employment accounts for the same share of employment as in the nation. This dissimilarity occurs despite a strong construction presence in Washington County. However, in both areas, heavy/tractor-trailer truck drivers account for a notable share of infrastructure employment.

Pay 

In Washington County, infrastructure jobs requiring less than a Bachelor’s degree pay roughly 26 percent more than similar jobs in the overall economy. Similarly, in the remaining Southwest Utah counties, infrastructure jobs pay 27 percent higher than other jobs with the same educational requirements. Many of the highest-paying infrastructure occupations in both areas necessitate just a high school education (plus on-the-job training).

Education and Training 

About 97 percent of Southwest Utah’s infrastructure jobs typically require less than a Bachelor’s degree. Most infrastructure jobs also require little on-the-job training. About 65 percent of these positions show the need for a high school education or less. Three-fourths of the jobs are in occupations calling for on-the-job training of a month or less. About 75 percent of infrastructure employment is involved in operating activities. Construction-related activities account for the next largest share at 15 percent.

Looking Forward 

Over the next decade (2014-2024), infrastructure employment in Washington County is projected to grow at about the same rate (40 percent) as overall employment (39 percent). However, in the other Southwest counties, infrastructure employment is expected to expand more slowly (16 percent) than all jobs (20 percent). Growth should create more infrastructure openings in Washington County while replacement needs are expected to dominate openings in the other Southwest Utah counties.