Impact of Increasing Construction Worker Wages

Over the last ten years, the construction industry has seen a myriad of wage changes – ranging from the highest, a 4.4% increase in 2007, to the lowest, a 2.2% increase in 2009, and now back to about 3.8% this year.

In fact, according to the U.S. Bureau of Labor Statistics, the average hourly construction wage in September was $30.18 – a 3.1% increase from September 2017.

To put these changes into perspective, here’s a snapshot of construction worker wages and salary increases over the last ten years, courtesy of PAS, Inc.

Year       Construction Worker Wages    Increase All Exempt Salaried Worker Increase
2007 4.3% 3.9%
2008 4.1% 3.9%
2009 3.0% 2.2%
2010 2.7% 2.9%
2011 3.0% 2.7%
2012 3.2% 2.6%
2013 3.2% 2.9%
2014 3.5% 3.0%
2015 3.7% 3.0%
2016 3.6% 3.0%
2017 3.7% 3.0%
2018 3.8%  

From this mapping, it’s clear the construction worker wages have increased more year over year than the exempt salaried construction employees. What does this steady increase mean for finding and hiring skilled laborers?

According to ConstrutionDive.com, “Many contractors have been willing to live with smaller margins to attract new craft workers with higher pay.” If that is what the industry expects, then your firm may have to follow suit.

There’s been no change, however, in the labor shortage. ConstructionDive.com writes, “The pool of qualified workers is growing thin and even pay increases might not be enough to adequately staff  their projects.”

As a result, all of those skilled trades persons are in higher demand, which means they have the upper hand and can follow the money.

This is true especially if workers are interested in the residential sector.

Residential vs. Non-Residential construction wages

Historically, those in the residential construction industry have seen higher than average wage increases.

Even at the height of the Great Recession, residential construction wages were about 16% higher than overall private wages.

This year, though, construction employment rose by 18,600 jobs in the nonresidential sector, in fields like commercial building, specialty trades, and heavy and civil engineering.

What’s next for the construction workforce

The Associated General Contractors of America updated its Workforce Development Plan for 2018 and lists some ways that governments and industry professionals can increase their supply of skilled workers.

  • More funding for career and technical education programs
  • Expanded use of Pell college grants for short-term certificate programs
  • Give construction students more easily accessible information regarding industry opportunities and potential earnings
  • Reform immigration policies
  • Offer more apprenticeship programs
  • Increase industry recruiting

With the unemployment rate in September 2018 at an all-time low of 4.1%, the construction industry overall is booming and continues to grow for all involved.

By | 2019-01-18T12:12:37-05:00 January 18th, 2019|Construction News, Education, Thunderbolt University|