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By Laura Moretz
November 19, 2018
Construction workers are earning more than a year ago, or even a month ago. According to the Bureau of Labor Statistics, average pay rates have been increasing quickly this year, and September marked a record high of $30 an hour.
Total compensation costs for construction workers have been rising steadily in 2018, with an increase of three percent in the second quarter of 2018 over the same quarter in 2017. Wages and salaries increased an average of 3.2 percent in the second quarter of 2018 compared to the same quarter in 2017.
The average annual earnings of construction workers vary by state and region. There are some hot spots like San Francisco, commanding hourly rates of more than $84 an hour, or like New York City, more than $98, according to the Turner Townsend International Construction Market Survey 2018.
Outside of these prime locations, construction workers command different pay rates depending on the region. The Constructible site has an interactive map showing annual incomes for construction workers here. The site lists the states with highest annual pay and offers a second list with highest pay as adjusted by cost of living.
With cost of living taken into consideration, Constructible advises that these are the top ten states with the highest compensation:
North Dakota: $53,821
While a craft worker may have abundant choices in the current market, it’s a tough time to be a contractor with too much work and not enough people to do it. A recent National Association of Homebuilders survey found that in the last year, builders’ cost of labor increased 5.2 percent, and the cost of subcontractors rose 7.2 percent. The higher cost results from labor shortages, and these shortages push up the cost of houses.
Paul Emrath explores the effects of labor shortages in his Eye On Housing blog, saying that “the most widespread effects were causing builders to pay higher wages/subcontractor bids (reported by 84 percent of builders), forcing them to raise home prices (83 percent) and making it difficult to complete projects on time (73 percent).” Emrath emphasizes that the shortage of labor is outpacing inflation.
The number of builders who say that labor and subcontractor shortages have caused them to increase the cost of a new house has increased by 22 percent since 2015, the NAHB reports.
The trend is consistent across the industry. According to the August survey carried out by the Associated General Contractors of America,(AGC) 80 percent of contractors are struggling to find qualified craft laborers to fill jobs. The problem is generally acknowledged as one that is widespread and worsening.
The AGC has published a Workforce Development Plan that calls on the federal government to help prepare more workers for construction work. The report suggests that:
Over the next five years, the government ramp up funding for Career and Technical Education, a program that readies workers for construction careers. Funding is essential since this program requires expensive equipment for schools, and it is difficult to find instructors to teach it in public schools.
The government increase funding for the Workforce Innovation Opportunities Act, a federal job training program that gives employers incentives to collaborate with educators to provide training.
The government expand the use of Pell grants for short-term programs that would help recruit more students to construction careers.
The government reform immigration. “The lack of a legal visa program for construction workers and a recent tightening of legal immigration will worsen worker shortages if not addressed comprehensively.”
The government increase apprenticeship opportunities, overseen by the Department of Labor, with increased opportunities for new programs that would be rated on trainees’ ability to get jobs and wages.
The AGC plans to launch a digital recruiting campaign in a dozen metro areas. It is targeting people who are likely to be interested in construction careers and then is planning to expand this campaign after the initial launch. It will continue to emphasize recruiting veterans.
skilled labor shortage
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