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Did I ever tell you that I won the “shop award” in 1994?

Friends, family, and colleagues are groaning right now as they read this.  It’s an inside joke.

It’s one of those things that I started kidding about in my early 20’s, which was the early-2000’s, and thus wasn’t all that long removed from 1994.

But then as time began to pass, 1994 got further and further away.

At the onset of this inside joke, some would remark, “You’d better be careful or one day, you’re gonna be one of those old men telling stories from thirty years ago.”

Yes.  I’d better be careful.  Or…

But I’ve always believed in self-deprecating humour.  My father used to say, “You have to be able to laugh at yourself,” and thus I like to say things that subject myself to ridicule.

Those that watched Married With Children in the 1980’s and 1990’s recall Al Bundy’s sports claim to fame that he repeated over and over throughout the series.

Remember?

What was it?

The first person to respond with the correct answer gets the prize: our utmost respect.

Unfortunately, when I joke with my wife, “I won back-to-back Leaside Soccer Association MVP’s in 1994 and 1995,” I’m sounding a lot like the Al Bundy that I made fun of………..circa 1994 and 1995.

Now, just to triple-down on the theme of being an old man stuck in the past, let me say this: the day that they closed the ‘shop’ and took out the bandsaws, lathes, and drill presses to replace them with computers, monitors, and keyboards was the day that kids ceased to be taught REAL life skills!

I mean, take the jigsaw out of a 13-year-old’s hands and replace it with a keyboard, and who knows how that could alter the course of the future!

In any event, “Industrial Arts,” as it was called, helped make me the person I am today.  And yes, I did win the “Shop Award” at Bessborough Public School for the 1993-94 school year, not that I’ve spent the last thirty years bragging about it, or anything.

And before you ask, no, I don’t have photographic evidence.

Wait…

…yes I do…

That’s a photo of a photo, by the way, hence the quality.

Some mothers know how to use scanners, but mine knows how to use her iPhone.

All y’all’s under thirty-years-old don’t know what it’s like to have all these printed photos in binders at your parents’.  Once upon a time, we didn’t have a decade’s worth of photos in the Cloud…

Now, before I run the risk of taking this from a funny skit about being (slightly) old(er) to a downright example of forgetting where I was going with this, let me get to my point.

Being raised in the time that I was, part of growing up meant learning how to use a hammer, screwdriver, drill, saw, sander, router, grinder, drill press, bandsaw, and oh yes – the thing I still dream about, the wood lathe.  I don’t know if society would allow 11-year-olds to use power tools that can cause major injury (Jeff Beamish and Dan Heilbrunn got the worst of the bandsaw accidents in my day…), but back then, it was necessary learning.

I suggest in jest that ripping out the shop for a “computer lab” wasn’t prudent, but it was a sign of the times, and it happened the year after my younger brother kept the family proud by winning the shop award in 1995-96.

Nevertheless, the days of getting a job on the line at a factory and owning a house, coming home to kids, Bobby and Susie, and wife, Sandy at the end of a long day, having Spot the dog bring your slippers, and living a lavish life on a peasant’s salary were already waning back then.

I’ve told this story before, but when I was in Grade 12 and we were all deciding which universities to apply for, a guy in my class named “Rob” said to me one day, “This is such bullshit.”

Over the P.A. system, we heard, “Grade twelve students, please note that York University, the University of Toronto, and the University of Guelph will be in Room 100 today at 1:00pm.”

I asked Rob, “What‘s bullshit?”

He said, “This school is only interested in universities coming here.  Where are the colleges?”

I didn’t know the difference at the time.  A “college,” in my mind, was simply the American equivalent to our “university.”

But Rob explained that Humber, Sheridan, Seneca, Centennial, Ryerson (before it was a university and before the name was canceled…), George Brown, and other “colleges” were just as important to the future development of Leaside High School students, but none of them were being invited to present like Western, Guelph, McMaster, McGill, and other universities.

I asked Rob, “What’s the difference?  I mean, like, what are you looking for?”

Rob, in a moment of maturity that can’t be understated, looked at me and said, “Do you think I’m going to university to learn business or engineering?  Am I going to get a Master of Science?  Fuck no.  I need to learn a skill, dude.  Like how to use a soldering iron so I can be a plumber, or like, what the hell an electrician does.  I need to learn how to take apart and put back together the engine of a car or something.”

And that just might be the single-most intelligent thing I ever heard come out of another student’s mouth in all my time at that school.

At that time, whether it was the teachers, the parents, the administration, the larger school board, or just society in general, everybody was being pushed into university, not college.

Why?

Because in university, you get a degree.  In college, you “only” get a diploma.

This, of course, was the start of kids spending four years in school to graduate with a Bachelor of Arts in nothingness, who then had no clue what to do with their lives, no life skills, and if they weren’t backed by middle-class parents (or better), then they were already behind in the game of life.

Meanwhile, those who went to college and learned a trade were already making money, were in demand, and had a chance of becoming a successful business owner one day.

One kid I went to high school with is a multi-millionaire today because he went into “the trades,” as it was called back then, started a business, franchised, and now spends six months of the year in Europe.  He puts me to shame.  Me and my university degree that all the teachers and administration held so near and dear.

So, what’s changed since then?

I’m not asking rhetorically.  I’m out of touch.  My kids are six and three, respectively.

But I will say, based partially on hearsay and observation, and partially on reports like the one I’m going to share, that we do not have nearly enough “kids today” going into skilled trades.

What 19-year-old says, “Mom, dad, I want to be a sheet metal worker?”

A smart one, probably.  But as the sarcastic and cynical version of that question goes, I just don’t think there are many kids like that.

On Monday, we talked about the BMO Economics report that painted a very bleak picture of how to solve the “housing crisis.”  In fact, there weren’t really any solutions proposed, and the report kind of concluded with a veiled “We’re all screwed theme.”

One of the points I glossed over because I knew I would come back to it today was with respect to the lack of Construction workers available and how that impacts our ability to double or triple supply in our market, overnight, as the politicians have suggested.

Recall this statement in the BMO Economics report:

“While most will argue for a supply-side fix, our longstanding view has been that it’s wishful thinking to believe that an industry, already running at full capacity, can simply double output in short order, flood the market with new units and bring prices and rents down.”

How would we expect output to double?

Moreover, what would we need in order for output to double?

We would need double the number of developers, or double the capacity for existing developers.

We would need double the amount of approved building sites, and double the amount of civil servants to oversee and approve new developments.

And of course, we would need double the amount of Construction Workers to actually build the damn houses!

Here’s where today’s economic report comes into focus:

CIBC CAPITAL MARKETS
“If They Come You Will Build It – Canada’s Construction Labour Shortage”
June 20th, 2023
By: Benjamin Tal

Click on the link to read the full report, but let’s go through some important sections.

“CMHC suggests that we will need an extra 3.5 million units by 2030 to restore affordability, and the province of Ontario is calling for a doubling in the annual pace of housing construction in the province to 150,000.”

And there we see that word again: doubling.

We need to double the annual pace of housing construction.

But how?

Olivia Chow won the mayoral election on Monday night.  Does she have the capacity to help?  Is it within her purview, or that of city council?  Do they have the funds?

Here’s more:

“As big as those numbers are, the real gap is even larger, as official figures (upon which those estimates are based on) grossly undercount housing demand by students and non-permanent residents, as we have illustrated in previous research. Even worse, the gap is growing with every day that passes without meaningful action.”

Alright, so then 3,500,000 new units by 2030 is more like 4,000,000?  Or more?

But as the topic of the report goes, Mr. Tal points directly at the number of construction workers, or rather the lack thereof:

“It is hardly a secret that the industry needs more workers, and fast. Ask any developer about supply issues and the availability of labour usually tops the list. And there is no shortage of statistical evidence of that shortage. With no less than 80k vacancies in the industry, the vacancy rate is at a record high and a full percentage point above the national average. More than half of that demand is for specialty trades contractors. The wage mechanism is clearly reflecting that reality, with average wages in construction rising notably faster than in the economy as a whole.”

Mr. Tal notes that increased demand and rising wages have resulted in workers moving positions more frequently.

This isn’t unique to construction, of course.

In recent years, we’ve seen far less “loyalty” among younger workers who switch jobs more frequently, often for modest pay raises.

HERE is a Forbes article that links switching jobs to higher pay.

But the average job tenure in the construction industry is now at an all-time low and the trendline is pointing straight down.

Here’s another interesting point:

“What’s more, the lack of labour on the job site is leading to a situation in which the industry is increasingly relying on new, untrained labour, which adds to the inefficiency issue, while safety is rapidly becoming a top concern for many construction companies.”

Untrained labour isn’t just a safety concern, but rather what about the quality of construction?  What about the efficiency or speed?

Is this why projects are taking so long to complete?

CIBC gives us this graphic to put a picture to the theory:

As I said above: it doesn’t seem like the proverbial Bobbies and Suzies are going into the skilled trades.

So what happens when the population ages?

“The Canadian labour market is aging and the construction sector is no exception. The share of construction workers over the age of 55 is now at a record high, and given that the average retirement age in construction is notably lower than what’s seen in the rest of the economy, the demographic issue is much more pronounced.”

Anecdotally, I’ve always mused that if you need, say, a bricklayer, you’re about a thousand times more likely to see a grizzly, weathered senior named Pat show up to the site, with a dart hanging out of his mouth, lunchbox in tow, and calluses as thick as his eye-glasses than you are to see a pristine chap named Blake arrive on his e-bike, looking like Derek Zoolander shoveling coal…

Here’s another pretty telling chart from the report:

So how do “we” get more young people into the skilled trades?

Those with children in high school, feel free to tell me which colleges and universities are coming to schools to present.  Is it like it was in my day, when the colleges are shunned and the administration pushes everybody into even the most basic university programs?

Should the government be subsidizing the tuition of tradespeople, or is that just another way for our government to spend money for a select portion of the population?

So that brings us to the intersection of immigration and construction workers, which is something I’m surprised we haven’t talked about before.

Is there an expectation that all immigrants should be disembarking the proverbial boat while carrying a tool belt?

Some choose to think “immigrants” and think “refugees,” while others think “immigrants” and think much-needed doctors, engineers, and tech workers.

We all have a bias that we’re predisposed to, and we all have varying levels of intelligence and ignorance on this subject.

But when it comes to attracting immigrants in occupations that we need, like construction, it doesn’t seem that we’re making any headway.

In fact, we’re losing ground:

“Not only is the share of new immigrants in construction extremely low (2%), but it has been trending downward over the past decade. The highest share of new immigrants in construction is in BC, followed by Saskatchewan. While a recent study by CIBC Economics suggests that new immigrants play a significant role in elevating the non-inflationary growth potential of the economy by participating in the labour market at a rate that exceeds the participation rate seen among those who were born in Canada, the low share of new immigrants in construction is suboptimal.”

This chart says it all:

Going from 3% to 2% doesn’t sound like much, right?  We’ve had this discussion before.

But on a relative basis, this means we’re bringing in a third fewer construction workers today than in 2015, proportionally.  And this is happening at a time when politicians are talking about “doubling supply.”

The summer slowdown in the real estate market is almost upon us and I’m starting to think that’s a good thing.  The market needs a moment to pause, flatten, and absorb the latest surprise rate hike.

With another rate hike expected in July, despite economists like Benjamin Tal suggesting that this is overkill and that inflation is under control (May came in at 3.4%, by the way!), we could see a sluggish market in the fall like we did in 2022.

But the medium-term prospects of the market are anything but bearish, especially when you consider that “affordability” is a concept that folks at BMO Economics don’t believe is a reality anymore.  I shudder to think about the long-term prospects of affordability, especially in light of needing 3,500,000 new units of housing by 2030, not to mention the lack of construction workers being trained or entering the country, and the massive number that are approaching retirement.

So, then…

…any big plans for the long weekend?

The post Now Hiring: Anybody Who Can Swing A Hammer! appeared first on Toronto Realty Blog.