Thu. Dec 26th, 2024

We’ve written a great deal about how 60+ million baby boomer retiring over the next decade are going to drain the labor force of productivity but what does that mean and what are some examples? Let’s take a look through the Infrastructure Report Card.

Infrastructure – Bridges

Estimates say that there are 220,000 bridges that are in need of repair or replacement and the anticipated costs is about $140 billion but what none of these reports state is where the people to work on 220,000 bridges will come from given the current state of the labor market.

At the current rate of investment, it will take until 2071 to make all of the repairs that are currently necessary, and the additional deterioration over the next 50 years will become overwhelming.

Infrastructure Report Card

Infrastructure – Water

The vast majority of water pipelines and infrastructure is over 50 years old and crumbling. According to McKinsey

The US Environmental Protection Agency (EPA) projects water-pipe replacement rates will peak in 2035 at 16,000 to 20,000 miles of pipes replaced per year—four times the current annual replacement rate of 4,000 to 5,000 miles.

McKinsey

Once again, very prudent observations about the work that needed and assumptions about how much it will cost but no real thought to where these workers will come from to work on all 20,000 miles of pipeline.

Infrastructure – Roads

It is estimated that 40% of roads across America are in poor condition and need repair.

America’s roads are critical for moving an ever-increasing number of people and goods. However, these vital lifelines are frequently underfunded, and over 40% of the system is now in poor or mediocre condition.

Infrastructure Report Card

Who’s going to fix the roads? At the moment, there are bidding wars between Amazon, Walmart, and Costco each paying $20/hour to $30/hour to stock shelves and checkout customers. How much will people need to be paid to be out in the sun digging ditches and running pipe or pouring asphalt. Also keep in mind that this type of work is a young person’s game, 50 and 60 year old people aren’t going to be too viable for this type of hard work so who’s going to do it?

When we say tough choices, this is what we mean, and it’s happening all over America. In Alabama, they are acutely aware of the problem.

“Our licensed professionals now are tempted by positions in manufacturing,” Huntsville Hospital recruitment manager Shannon Bjornseth said. “There are more job opportunities than there are people available to fill them.”

Montgomery Advertiser

Over the next 8 years it will be choices between roads and bridges or health care and retail. In the meantime we’re researching key infrastructure stocks PWR, MTZ, DY, and a few others to possibly invest when the dust settles.

Stay tuned and stay solvent…

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