The reason construction workers’ wages keep climbing is basic economics.
“It’s a matter of supply and demand,” said George Hess, founder and CEO of Vantage Homes. “If there is one worker, and me and another company want them, they can ask for more pay. It’s a different number if it’s just me wanting them.”
Construction worker salaries both nationally and locally continue to rise as companies struggle to fill open positions.
According to the Bureau of Labor Statistics, commercial construction worker wages are growing 3.8 percent per year while residential laborers are seeing a growth rate of 5 percent, which is almost double the wage growth for all other American workers.
“We hear about the shortage or need for workers all the time from our members,” said Marla Novak, the director of government affairs for Housing & Building Association of Colorado Springs. “It’s a tough ball game at this point for everyone, including local governments, to get enough qualified workers for those open positions and not delay projects.”
There are two major contributing factors behind wages jumping and the labor shortfall, including the most recent housing market crash, Hess said.
“This last housing recession was unprecedentedly long,” he said. “At the end of the day, it lasted, in my opinion, eight years, and folks simply didn’t have a choice; they had to make career changes.”
Seasoned construction workers opted to enter retirement or shift the scope of their work.
“We saw a lot of our trade partners get more involved in remodeling and service work, so they could keep their folks busy,” Hess said. “They had to change their business model from a company who was just working on new stuff to a company repairing old stuff.”
The BLS reports the construction industry’s unemployment rate peaked at 27.1 percent in February 2010 with 63 job openings at the time nationwide. In January 2018, the rate was down to 7.3 percent with 252 vacancies.
“We lost a large number of fine craftsmen as a part of that housing market crash,” Hess said, adding homebuilders in the area currently are experiencing a backlog of homes to be built. “If our foundation people can only put in, say, 10 foundations a month, then that is the limiting factor for us. Everybody has a backlog of about three to five months because we can only produce so many homes because of the lack of labor force that we have.”
Hess also believes schools eliminating vocational training has intensified the workforce deficit.
“For many years, vocational education was ignored by parents and educators,” he said. “What we are seeing now is a result of that with the shortage of labor in the marketplace.”
In 2015, Hess helped the Housing & Building Association of Colorado Springs launch its Careers in Construction program in an effort to spread construction trade education to young people throughout the Pikes Peak and Southern Colorado regions.
“The objective is as the name implies — to create career opportunities for young people,” he said. “Careers in Construction exposes students to the various trades. Then, beyond that, participants can enter into apprenticeship programs or go on and get their journeyman license in a certain trade like engineering or plumbing.”
The program has continued to expand and now includes several area school districts in addition to its curriculum being used as a model nationally by the Home Builders Institute.
“It’s spreading,” Hess said. “It’s being realized all across the country the need for these programs, and we are very excited about everything that’s happening.”
Still, the program never was meant to provide an immediate solution to the skilled workers shortage.
“There is no quick fix for the problem,” Hess said. “But what we have done as a homebuilding company is get involved in programs like this to work on a solution to solve the problem long-term.”
The program recently began focusing more on placing participants in summer internships or jobs.
This summer, Nunn Construction hired a student while Home Run Electronics offered another one an electrical apprenticeship, Novak said.
“We are really working to get our over 500 members to offer some sort of internship,” she said. “We are trying to get it to where as the students go through and complete the Careers in Construction program, they get offered summer internships so they can get a taste of what the job and jobsite really entails.”
“We are working with exiting military at Fort Carson and training them with the same curriculum as we are using in the high schools,” Hess said. “It’s helping us homebuilders with our staffing problem and directly targets those infantrymen or soldiers whose skills aren’t as transferable into the civilian world. That’s been a big boost to the workforce and it’s a great thing for those veterans.”
Another hope or belief is that as more people start construction careers, the stigma normally associated with those types of jobs will diminish.
“That can sometimes hinder younger people from joining,” Novak said. “It was pushed in the school system for several years that you have to go to college rather than get a certificate in construction or plumbing, but now, the students are seeing it’s something they can enjoy and make good money doing.”
The median annual wage for construction and extraction occupations was about $7,000 more than it was for all occupations in May 2017.
“I think the construction workforce will begin to increase just from all job seekers seeing there are jobs open and what they pay,” Hess said. “They will hopefully then realize they can jump into the industry because we are even willing to train them if need be.”