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August 13, 2013

Host: Ted Simons

Construction Worker Shortage

  |   Video
  • As the housing market heats up, Arizona is facing a shortage of construction workers. David Jones, president of the Arizona Construction Association, will talk about the shortage.
  • David Jones - President, Arizona Construction Association
Category: Business/Economy   |   Keywords: construction, workers, shortage, arizona,

View Transcript
Ted Simons: Arizona's housing market is heating up, but the state is now facing a shortage of construction workers. For more we welcome David Jones, president of the Arizona Construction Association. Thank you for being here.

David Jones: Thank you for the invitation.

Ted Simons: What is the state of the construction industry right now, here in Arizona?

David Jones: We suffered greatly. We along with the tourism industry in this state, suffered greatly during the recession. We're now starting to see signs coming back that there's vitality, individuals are going to work, we're starting to see houses being built, lots being purchased for future building. And what we're finding is that we don't have adequate skilled labor work force for construction. Not only here in Arizona, but throughout the country. So it's not a case of going elsewhere in the country to bring people in.

David Jones: Define a skilled construction -- What kind of jobs are we talking about?

David Jones: Individuals that require a specific skill such as plumbers, electricians, brick Mason, carpenters, roofers.

Ted Simons: And we used to have enough of these folks to go around in the salad days, correct?

David Jones: We had enough at the time, but even during the peak there was still a demand because our market was white hot. Arizona led the country as one of the most rapid growing states, so the appetite for construction was huge.

Ted Simons: What happened to those that were here back then? Where did they go?

David Jones: We don't know. We actually don't know. We've lost around 208,000 jobs. And during that period of time, a lot of people have left, where they have gone, we don't know, whether it was neighboring states. But the fact of the matter is, we're finding that they're just not there.

Ted Simons: Career changes for some you think?

David Jones: Very possibly what we're suspecting is that individuals that have been in construction because it does modulate with opportunities of going up and down, that they've decided to retrain themselves and find other areas to work.

Ted Simons: Impact of SB1070 keeping some away as well I imagine?

David Jones: I've probably been asked that question about 50 times. I don't think it really, Ted, would be fair to say 1070 was exactly the silver bullet. But I think it hit at the same time went into effect at the same time as the recession. And I think the challenge will be for Arizona as we lead the recovery is, how welcome will individuals feel coming back here if they are a Hispanic or Latino?

Ted Simons: With that in mind, how much would immigration reform as we know it help?

David Jones: Well, we think it would help greatly. We're disappointed that we're seeing Congress address the agriculture areas, but the fact is, in this country the average construction worker is 47 years old. 51% of our infrastructure is in need of repair, or replacement. The youth of America is not as interested as previous generations in working with their hands and minds.

Ted Simons: With that in mind, I know some would say the solution if you don't have enough jobs, is to pay a higher wage for those jobs and the people will come. Valid?

David Jones: Not necessarily. We took a survey not too long ago within our association, and I'm going back just prior to the recession, and our average annual was between $42,000 and $52,000 a year for some of the skilled crafts. Today, with demand that will be coming up, there will be a lot of overtime, opportunities, operating engineers, heavy equipment operators would probably up in the 60s, $65,000.

Ted Simons: And I don't want to get too far into the immigration argument, but there was always this argument Americans don't want to do certain jobs, or increasingly hesitant or reluctant to do certain jobs. Is that what we're talking about here?

David Jones: I think what we're talking about, we have to go all the way back to World War II, when soldiers returned, they got the GI bill, they started to get some education, some left the family farms, and they went to work at factories. And then Americans came up with this paradigm that you're going to go to college and you're going to get an education. You're not going to work on the farm, you're not going to work in the factory. And consequently, we end up with a highly educated society but we've lost the worker bees.

Ted Simons: Yeah, it’s interesting. But you've got to wonder if the worker bees, if you make it more attractive do they start buzzing around?

David Jones: I think it would require training. And I think that what we find in a personality profile of individuals working construction, they'd like to work outdoors, they're task oriented, they like to see things completed that they built, and so we need to, as an industry, enhance our image and create some incentives.

Ted Simons: I was going to say, education and training has to be a factor.

David Jones: It is.

Ted Simons: What do you want to see done?

David Jones: I think we need to look at a realistic guest worker program. We're not going to be able to meet the needs, I don't think we can train quick enough. If we would go on a national program of infrastructure repair, that's going to serve out and sap out the individuals that would -- May work on residential construction. We looked at -- There are two projects coming up in the valley, if we look at west valley resort and casino, we look at the project over in Tempe, $600 million dollars apiece projected on those, that's a roughly around 6,000 construction related jobs per project. So consequently, when those projects break, it's going to be a greater demand.

Ted Simons: Last question -- Is there any sign that supply is getting closer to demand when it comes to construction workers as we stand now?

David Jones: No.

Ted Simons: So it's not a good situation, it's getting worse.

David Jones: It's getting worse. We look at Canada, they're in Ireland right now recruiting to get Irish workers. And the U.K. and the eastern European country trying to get workers.

Ted Simons: Are you trying to get the attention of lawmakers?

David Jones: We are.

Ted Simons: Any response?

David Jones: No.

Ted Simons: It's good we had on you. Thanks for joining us.

Ted Simons: Wednesday on "Arizona Horizon," world renowned physicist Lawrence Krauss joins us for his monthly discussion of science issues. And we'll hear from an ASU student who used his disability to help develop a program for helicopter pilots. That's at and on the next "Arizona Horizon." That many is it for now. I'm Ted Simons. Thank you so much for joining us. You have a great evening.

U.S. Airways/American Airlines Merger

  |   Video
  • The U.S. Department of Justice has filed an antitrust lawsuit in an effort to block the merger of Tempe-based U.S. Airways and American Airlines. Airline expert Robert Mittelstaedt, who is also the former dean of Arizona State University’s W.P. Carey School of Business, will talk about the suit.
  • Robert Mittelstaedt - Former Dean of W.P. Carey School of Business, ASU
Category: Business/Economy   |   Keywords: lawsuit, us airways, american airlines, tempe, merge,

View Transcript
Ted Simons: Good evening, and welcome to "Arizona Horizon." I'm Ted Simons. The Justice Department today filed an antitrust lawsuit to block Tempe-based U.S. Airways' merger with American Airlines. Joining us now is Robert Mittelstaedt, he's an airline industry expert and the former dean of ASU's W.P. Carey School of Business. Good to see you again.

Robert Mittelstaedt: Nice to be back, Ted.

Ted Simons: All right. Is this action by the Justice Department a surprise to you?

Robert Mittelstaedt: It was a surprise to a lot of people because previous airline mergers seemed to have gone pretty smoothly without much objection, so it’s definitely a bump in the road.

Ted Simons: What happened? We had delta and Northwest going through no problems, united-continental, relatively no problems. Big problems here? What's the difference?

Robert Mittelstaedt: Well, depending on how the process plays out, there could be some significant problems. I think what's behind this is two things. One is people beginning to ask when is a small number of airlines too few for competitive purposes. And so you hear it by saying we're going from four to three, we're really going from five to four because Southwest is a big player as well – domestically, not international like the others. And so that's one of the questions that's being asked legitimately. I think -- The cynic in me says the other reasons this probably affects Washington Reagan airport more than any other, and there's a lot of politicians and Washington people that suddenly say, “Oh, my gosh, this is our home airport, we've got to worry about this.”

Ted Simons: We had on you last time discussing the fact the merger had been approved by all parties that were -- most parties that were needed. You mentioned that there might be a sticking point there at Reagan national in D.C., and that is one of the sticking points it sounds like duplicating routes is a big factor here. Correct?

Robert Mittelstaedt: Yes and no. There are not a lot of routes that they compete on directly. In fact, out of Washington, I talked to a friend in North Carolina earlier today who told me he saw something in the paper there, there are only two routes American and U.S. Air have exclusively, one is from Washington to Raleigh Durham. Those two routes, whatever they are, will be suspect certainly. But the whole system fits together pretty nicely in terms of not overlapping. This GAO study came out where they said, but if you consider connections, it's over 1,600 routes they compete on. Well, connections yes and no. Just because we have family in New Orleans we do back and forth there from time to time, you can get there on U.S. Air but you have to change flights in Charlotte to get to New Orleans. So I don't consider that really competitive with American where you change flights in Dallas to get to New Orleans, because you are going to fly an hour farther each way. So some of the information coming out here looks to be pretty shallow in terms of the depth of analysis that's taken place in terms of the competitiveness between these two companies.

Ted Simons: That same study would say competition would be reduced because of the connecting services, the overlapping and connecting services, competition reduced in 38 states, you're not necessarily buying that?

Robert Mittelstaedt: I'm not buying that. It depends on whether you want to connect in Montana to go to Miami or not.

Ted Simons: Well, OK. The feds are basically saying eliminates competition, puts consumers at risk of higher prices, puts consumers at risk of reduced services. Are these valid concerns?

Robert Mittelstaedt: I think an awful lot of this is conjecture based on somebody saying, I think this is what will happen in the future. Rather than any hard evidence that anything like this is going to take place. The point that I keep coming back to is that airfares in this country are a bargain compared to what they have ever been in the history of the world, especially if you go back to the pre-deregulation days. We literally are paying maybe 20% of what we paid 30 years ago to fly. And an airfare from the East to West Coast today costs you less than you might pay for your first couple of nights in the hotel when you get there. So it's not that, in an absolute sense, there's a problem, and I think that going with three major airlines competing hard with each other, not only domestically, but to to get people into their international routes, I don't think you're going to lessen competition.

Ted Simons: I guess that's the big question, though, isn’t it? If prices are what they are now, and you see that as one of the best bargains in the history of airfare, does that get compromised with this one more merger?

Robert Mittelstaedt: I don't think it will. But the problem is that's all conjecture, regardless of which side of the argument that you're on. There are laws against collusion, laws against all sorts of things. But one of the examples people use, all of the airlines increased baggage fees, except Southwest; Southwest is still out there doing something different. And yes, if one of them tries it and it works, the others will try it too. But that happens in any industry. That's not unique to the airlines.

Ted Simons: What happens next? Are we going to get countersuits from the airlines?

Robert Mittelstaedt: Well, they certainly will fight the suit. It's not yet a countersuit, but the first step is that a judge has to hear this, and decide whether to grant an injunction or not. If they grant an injunction, that stops it where it is, and they plan to go to a trial. And if it goes to a trial, it's a judge trial, not a jury trial, it still just goes on for some period of time, and a judge has to decide whether the damage to the public at large is greater than the advantages of such a merger.

Ted Simons: What kind of time frame are we talking about here?

Robert Mittelstaedt: You just don't know. There's a lot of stuff that can go on. They could get into negotiation if the injunction is granted, and it may get resolved before it goes to trail, or it could go to a full-blown trial.

Ted Simons: How likely is it, as we stand right now, that this merger doesn't happen?

Robert Mittelstaedt: I think from a legal standpoint, and this is -- This has political and economic and personal things swirling all around in terms of people's preferences and their airport and everything else, I think it's just much more difficult to project what's going to happen here at this point. But I think it gets to be 50/50, because of all the factors at work.

Ted Simons: 50/50, that's interesting. That's a far cry from what we've been hearing.

Robert Mittelstaedt: It looked like a done deal before.

Ted Simons: No kidding. Last question -- Let's say that there is no merger. What happens to both airlines?

Robert Mittelstaedt: Well, the reality is that both airlines are competing against much larger, better, capitalized broader route structures against Delta and United if they can't combine. And if they can't combine, they still have to fight to be able to buy the best airplanes to provide the highest level of safety, to provide training, all these other things that are more difficult to do as a smaller player. From a pure marketing standpoint, it's harder to attract the public. You have to spend the same marketing dollars, even though you're a smaller player. I think it becomes a difficult challenge for them going forward. I believe it would make -- The merger makes sense, but there's a very complicated process by which this is going to get figured out.

Ted Simons: Complicated indeed. Good to have you. Thanks for joining us.

Robert Mittelstaedt: Nice to see you again.

Yarnell Hill Fire Aftermath

  |   Video
  • The Federal Emergency Management Agency has declined to declare the Yarnell Hill Fire area a disaster area. Also, the family of one of the firefighter’s killed in the blaze is fighting to get death benefits. House Speaker Andy Tobin will address those issue
  • Andy Tobin - House Speaker, Arizona
Category: Community   |   Keywords: yarnell hill fire, update, around arizona,

View Transcript
Ted Simons: The Federal Emergency Management Agency has declined to declare the Yarnell Hill fire a major disaster. This as the city of Prescott has denied death benefits for many of the firefighters killed in the fire. House speaker Andy Tobin is here to address both of those controversial and emotional issues. It's good to have you here.

Andy Tobin: Thanks for having me.

Ted Simons: Let's start with FEMA. The federal disaster aid for Yarnell denied. What are your thoughts?

Andy Tobin: Well, it's not just my thoughts. The minority leader of the house Chad Campbell came out, and we collectively today we went ahead and wrote to the President and said, please reconsider this. This community lost 20% of their structures. I know this is a little town, but these are taxpayers, too. And we've had other emergencies, Hurricane Sandy, several of them out there, that's Arizona taxpayer money, too, going there. For them they've waited so long, and to say, “You don't qualify,” seems almost intentional to me. I have to admit I'm pretty disappointed in the President, I'm especially disappointed in how long they took to get us here, and I respectfully request they help us again. Take a look at this. I've got 30-something percent of these people under the poverty line anyway. We don't need all their help. This is just a little hands up to some few folks. And I think it was a snub right at Arizona directly at us.

Ted Simons: FEMA's response was that the severity and magnitude of the fire was not enough.

Andy Tobin: Well, I would share with you, if that's the place, why did it take them a month to do it? I would also share with you, if that's their status, every rural community in the country should be nervous about whether they're ever going to get support from the federal government.

Ted Simons: Do you think that's a factor, the rural-urban --

Andy Tobin: yeah, absolutely. There's not a lot of people in that town, the sheriff evacuated that town so quickly, I was down there that Saturday night, Sunday night, it was a very difficult time, very difficult event. We watched in the darkness as you can watch these propane tanks, it was the only thing you could see by it was so dark. It's surreal. This was a Hurricane Sandy to those people who don't have their home. This was a Hurricane Sandy to those people who have nothing now. And there weren't very many of them that didn't have insurance or many that were underinsured, there's going to be some problems with of course getting up to code, things like that. But Arizonans are strong, we'll be fine. But to treat them this way is just beyond call.

Ted Simons: Where would the money have gone?

Andy Tobin: Well, what FEMA does that would have allowed federal people to help with -- First off, loans. To help those who are struggling. And for those who are so under the poverty line, there would be some grant money. It's not like it's a whole lot for each person. But $38,000, that could help you get the next step up. And maybe you could get the loan to move forward. So the answer -- There wasn't going to be a whole lot of money in it, but we've got a water infrastructure problem out there, the pipes are old, they broke through this fire crisis, and I have fire trucks that are in difficult way, it wasn't fire-related, but this is old equipment, we still have a responsibility to help these people get themselves to a safety area. And we have a helicopter pad that can use help. This community, they're not out there begging. They just want what everybody else gets.

Ted Simons: The feds responded in the letter saying that state and local governments were capable of this kind of help, and when you mention how few people there are and how little money it is, it almost in some respects make their argument, that you guys can handle this.

Andy Tobin: But I would then argue there are other -- We went back with billions of dollars for Hurricane Sandy. The answer is, we do have -- We have expanded our emergency funding that we did this last budget. So we've already expanded it. But at the end of the day, these are federal taxpayers, this is on state lands, we get it. But at the end of the day, these folks have the same losses that somebody else somewhere else in the nation has. So does that mean New Jersey and the Tri-City area couldn't do that? Baling them out was a mistake? I don't think so. I think Arizonans were happy to be part of helping build up the East Coast again.

Ted Simons: I've seen criticism saying that these people should have had insurance. How do you respond to that? Because some of these folks are underinsured, or no insurance. That's a pretty dangerous way to live.

Andy Tobin: It's dangerous to live that way anyway, but when I mentioned how many people below the poverty line, that sends a message. These folks have paid off their house over time, but they can't afford insurance anymore, they're struggling. The west side of the street is gone. It's gone. There's some old, old structures. A lot of Yarnell was built on some of these old tailings, so you have infrastructure that's bad, they might not have been able to get insurance because they have an old building. It's going to happen. Everybody isn't insured. And everybody can't afford that. And that's why you have neighbors trying to help and the Red Cross has been great, we have had great response. The President shouldn't have snubbed his nose at us.

Ted Simons: Last point, and that just saying the president snubbing -- There's some who are saying that it's hypocritical for Arizona leaders who are so critical of the government, and so critical of federal aid in so many ways, now saying, why not us, why not now? Respond to that, please.

Andy Tobin: I'd be happy to respond to it. I want our federal dollars to come back here. But if you're not going to have an emergencies theme applies to everybody, don't have Arizonans pay for everybody else's emergency stuff. That's my response. I don't have a problem with the government stepping in and helping with infrastructure, helping taxpayers, helping Americans who have worked all their lives to put their lives back together. We're a very generous nation, very generous state. But does that mean Arizona shouldn't be at least asking, hey, we should expect some help. This is pretty much across the board, this was a mistake of theirs.

Ted Simons: I want you to comment about the death benefits for the seasonal and temporary workers. I'm hearing folks saying these are seasonal, temporary workers, they knew what they signed up for. And this is something that they didn't expect. But it was within the deal. How do you respond to that?

Andy Tobin: It is within the deal. Here's the response. The only way that many of these smaller towns can have these hotshots is if they have permanent workers and they have seasonal and part-timers around them. They can't afford it any other way. I get that. We don't want to lose that. But if at the end of the day you are losing lives that are not having their beneficiaries compensated, I think it makes it more difficult for to us maintain some of these hotshot crews, who are saving our homes all across the state. So I'm not saying Prescott made any mistakes, I know what everybody signed, I get it. But this is an exceptional situation. 19 people just don't die in our fires every day. The law is the law, we can put attorneys down here and fight every day about whether they signed this or not. But what's right is, is that if you have folks who are fighting on state land protecting your home and mine, our families, they should be treated, their families should be treated the same.

Ted Simons: You're drafting legislation, what will that call for and is this seasonal and temporary firefighters all seasonal and temporary workers?

Andy Tobin: This has to do with anyone on state land. Anyone killed on state land fighting -- First responders of any kind.

Ted Simons: First responders.

Andy Tobin: That's exactly right. There's three different bills. One is to help the city of Prescott, because those who were permanently protected, and were on pensions, the city of Prescott will have liability going forward for those families, they have to contribute into that pool. Well, I think we've missed it somewhere along the line, we should have some sort of blanket catastrophic coverage for these incidents that may occur down the road. So they're going to be additionally hurt. One bill helps the city, one bill helps the beneficiaries as we go forward. We have to find a way to do, that make sure we're not having a problem with our gift clause. And the other one has to do with protecting that site where we lost 19 firefighters.

Ted Simons: A special session likely?

Andy Tobin: I don't know. We'll have to -- Representative Justin Pearce is very anxious to start moving forward and making sure we're dotting the Is and crossing the Ts on these bills, so I think when we're ready to go we'll let the governor know and the Senate President has been very supportive, and Senate Democrats, House Democrats, House Republicans all seem to be on board with trying to find the right way to go.

Ted Simons: Very quickly -- Does the state need to look again at the issue of municipal employees working, doing anything on state lands?

Andy Tobin: Well, I don't know what you mean by that. I don't know if we'd have to look at it all over again.

Ted Simons: In terms of protection, benefits, coverage?

Andy Tobin: Yeah. Well, I'm just going to tell you, if we're going to put somebody on fire line and they're risking their lives and their families should know the state of Arizona will take care of them.

Ted Simons: Speaker, thank you so much for joining us. We appreciate it.

Andy Tobin: Thanks for having me.