Hourly construction wages hit 40-year high amid rising demand for workers

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Rapidly rising hourly earnings have enabled the construction industry to add 36,000 employees in May, according to an analysis by the  Associated General Contractors of America (AGC) of Arlington, Virginia. While these recent statistics show promise, the association says a record number of job openings going into the month suggest contractors want to hire even more workers—a sentiment that has plagued the industry throughout the ongoing labor shortage.

“It is encouraging that contractors were able to add workers in May, but they will need many more to meet the increasing demand for infrastructure and private nonresidential projects,” AGC Chief Economist Ken Simonson says. “Despite steeply rising pay for hourly workers, job openings in construction hit an all-time high at the end of April, while the industry’s low unemployment rate suggests experienced workers are scarce.”

Average earnings for production and nonsupervisory employees—mainly hourly craft workers in construction—rose by 6.3 percent from May 2021 to last month, the largest increase since December 1982, Simonson notes. Average earnings in the overall private sector, however, rose slightly faster, by 6.5 percent, making it hard for contractors to attract applicants for all openings.

There were 494,000 construction job openings at the end of April, a jump of 141,000, or 40 percent, from April 2021.

That was the largest total for any month since that series began in 2000, Simonson adds, citing government data released June 1.

The unemployment rate among job seekers with construction experience fell from 6.7 percent in May 2021 to 3.8 percent last month, while the number of unemployed construction workers fell by 250,000 to 392,000, suggesting few experienced job seekers are left to hire. Association officials cautioned that the lack of available workers is undermining construction activity, urging public officials at all levels to establish training programs to expose high school students and adults to career opportunities in construction.

AGC officials also called on Congress and the Biden administration to allow more skilled construction workers to enter the country legally.