Labor Pressures Lead to Changes
A look at the most recent job numbers sheds light on what’s happening in the construction industry. Also, proposed legislation would empower immigrant workers.
The Fed has been aggressively raising interest rates over the last year in order to tame inflationary pressures. Multiple large (.75%) rate increases have given way to the most recent and smallest quarter-point increase on Feb 15th. It’s the eighth straight increase since last March.
One of the Fed’s biggest concerns is that the labor market has continued to stay strong in spite of the rate increases. Those increases are nowhere as great as in the construction industry.
Strong Employment Numbers Show Construction’s Strength
In January, construction industry employment hit a new record. Construction Firms added 25,000 workers in January, and worker compensation rose more than in other sectors of the economy, according to the Associated General Contractors of America (AGC).
Companies are still filling positions after the pandemic, and demand for new construction has been growing.
“Construction employment and pay gains outpaced the economy as a whole in the past year, showing that demand for projects remains strong,” said Ken Simonson, AGC’s chief economist. “In fact, most contractors would like to hire even more workers and are raising pay in an effort to attract them.”
The construction industry employed almost 4% more workers in January compared to the year before. For the economy as a whole, employment was up 3.3% during the same period, showing construction’s relative strength.
Worker compensation continued to increase faster than the overall economy as well. Hourly earnings for non-management (craft) workers grew by 6.2%. Construction workers now average about 18% more per hour than the private sector overall.
It is revealing that in spite of the increases in compensation and hiring, job openings in construction recently set a 23 year long record. At the end of 2022, job openings totaled 359,000. It reinforces contractors’ complaints that they are not finding the number of workers they would like.
AGC did a survey that found 80% of firms have had a hard time finding qualified workers. AGC has encouraged immigration reform to allow more skilled construction workers to enter the country legally and has asked for more funding for construction related training and education.
Addressing Immigration In Construction
OSHA has announced that it has been given the authority to issue special visa certificates to non-citizens at work sites where particular types of criminal activity are under investigation.
Beginning at the end of March, OSHA will have the option to issue two types of visas, “U visas” and “T visas” during workplace safety inspections which are related to extortion, manslaughter, trafficking, felonious assault, forced labor and obstruction of justice, to allow them to assist law enforcement
“Protecting workers who are witnesses to illegal workplace abuses not only means workers can be treated fairly, it also creates a level playing field for employers,” Marcy Goldstein-Gelb, co-executive director of National COSH, said in a news release. “Companies that provide a safe workplace, use above-board hiring and recruitment practices and pay workers what they are owed should not have to compete with those who break the law to gain an unfair advantage.” *