The combination of a low unemployment rate, an increase in job openings, and lack of available and qualified labor in the construction industry has led to an increase in hourly wages, a new report from the Associated General Contractors (AGC) explains.
In June, construction employment rose by 21,000 jobs and by 224,000 over the past year, resulting in a 3.2% increase. On the flip side, unemployment dropped from 4.7% to 4.0% year over year. In May, there were 360,000 job openings in the industry, AGC states, which was the highest total for May since that data starting being collected 19 years ago.
Despite all of those job openings, construction companies are still struggling to hire qualified workers to fill those roles. One of the results of that has been an increase in hourly wages. According to the AGC, the hourly pay rate rose 3.2 percent year over year to $30.73. That rate is 10.1% higher than the private sector average.
The inability to find workers has also lead to an increase in benefits and investments in training. Focusing more on training allows companies to hire those with little to no experience in the construction industry.
AGC has called for increased funding for technical schools and immigration reform to help with the labor shortage.
“The nation’s education system continues to produce too many over-qualified baristas and not enough qualified bricklayers and other craft construction professionals” said Stephen E. Sandherr, AGC’s chief executive officer. “As a result of these educational imbalances, too many young adults are struggling to pay off college debts while too many construction firms are struggling to fill job positions that pay well and don’t require costly degrees.”
This report comes on the heels of a recent new US DOL apprenticeship expansion that has excluded the construction industry from receiving increased funds initially. The AGC was extremely critical of that decision, calling it “deeply troubling.”
As wages have risen overall, wages vary greatly on a state-by-state basis. Construction Junkie recently completed a state-by-state comparison and a trade specific breakdown of hourly wages if you’re interested in finding out more information.