Thank You for Your Service Could You Leave Early

The roots of formation of the labor crisis have two branches. The first, general population statistics, works against everyone. The so-called baby boom generation, those born between 1946 and 1960 comprise 77 million people. Younger workers in their 20s number only 45 million. There's simply a smaller pool to draw from to serve a growing industry.

The other branch is the industry's own doing. After the bust in the merchant and gas-fired power business, beginning in 2001, utilities and independents had to repair their balance sheets. Divesting assets, such as completed plants, projects under construction, electricity trading divisions, and the like, got the headlines nationally. But utilities en masse also instituted layoffs and early retirement programs. Two kinds of people take early retirement packages: Those who really want to retire early, and the motivated who think they can do better as independents.

In fact, the recent wave of reductions is only part of a 20-year trend in the electricity industry. The electric utility workforce has been declining since the mid-1980s. Of course, some of this reduction has simply been a shift in resources from utilities to nonutility segments of the business. Importantly, though, there have been no gains, while electricity demand continues to grow. Between 1998 and 2005, for example, we've added more than 200,000 megawatts of new gas-fired capacity while one estimate shows that the overall reduction in workforce has been around 25 percent.

Once again, my own experience in this regard is instructive. My oldest daughter is college bound. She showed an early interest in and aptitude for science and engineering. Have I encouraged her to seek a career in engineering or, more specifically, in the power industry? Hardly. In fact, I counsel against it. Traditional engineering functions are not valued the same way as the legal, investment, health care, and computer/information technology professions are. In this country, there is no longer any glamour in heavy infrastructure. In fact, my prediction is that we will ultimately import engineering talent from overseas—-just like some hire illegal immigrants to tend their gardens.

Another likely scenario is that we will utilize overseas talent remotely. We already have the equivalent of "sweat shops" in Asia that do engineering flow diagrams and process and instrumentation diagrams (P&IDs) for our power stations, as well as basic equipment calculations. This is the only way we're going to keep labor and engineering costs reasonable. In addition, this is where the talent will reside that does not require an investment in training and on-the-job experience. Once again, it is the path of greatest financial efficiency but not necessarily the one of long-term stability of our electricity infrastructure.

My daughter will be better off interpreting the legal frameworks for building power stations, providing investment services, or going into other sectors entirely. What my experience has taught me is that it is better to be associated with the services surrounding the infrastructure, not the physical assets themselves. Is this self-serving? Maybe. Is this the best course for the long-term stability of our electricity infrastructure? Probably not. Is this the best course for my daughter? I think so.

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