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

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). 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 continued to plague 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,” says Ken Simonson, chief economist for AGC. “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 most 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 enough applicants to fill all openings.

There were 494,000 construction-industry 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 jobseekers with construction experience tumbled from 6.7 percent in May 2021 to 3.8 percent last month, while the number of unemployed construction workers fell by 250,000 or 39 percent to 392,000, suggesting there are few experienced jobseekers left to hire.

Total construction employment moved up by 36,000 employees to 7,664,000 in May, with gains in each part of the industry. Employment in residential construction rose by 16,700 workers, including 5,000 employed by homebuilders and multifamily general contractors and 11,700 at residential specialty trade contractors. Nonresidential firms added 19,400 employees, including 2,400 at general building contractors, 5,700 at nonresidential specialty trade contractors, and 11,300 at heavy and civil engineering construction firms.

Association officials cautioned that the lack of available workers is undermining construction activity, urging public officials at all levels to put in place more training programs to expose high school students and adults to career opportunities in construction. They also called on Congress and the Biden administration to allow more workers with construction skills to legally enter the country.

“There is no shortage of available, good-paying career opportunities in the construction industry,” says AGC CEO Stephen E. Sandherr. “Public officials should be exposing people to construction career opportunities that pay well and don’t require a college degree and the debt that all too often comes with it.”