Labor Shortage Fix Requires New Outlook, Higher Wages

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By Jewel Edwards

Feb. 29 — Fixing the shortage of skilled labor for new home construction will require a cultural shift in the perception of construction work as a viable career option, industry experts and stakeholders said in a Feb. 26 forum hosted by HomeAdvisor.

The societal push for young people in the U.S. to pursue a four-year college education has all but eliminated the skilled craft industry as an area of consideration for jobs, economists and representatives from the real estate and home building industry said.

“There's more pressure to have a college degree,” Chief Economist Tara Sinclair said during the forum. “With that pressure in mind, people are making those career path plans at a very young age and aren't necessarily exploring their other career options that might be a better fit for them.”

However, pursuing a college education is likely a better path than seeking work in residential construction, which has a reputation for mistreatment of workers, low pay and high injury rates, economist and Michigan State University Professor Dale Belman told Bloomberg BNA Feb. 29.

“There are no benefits to residential construction when compared to a college education. If you want to attract people in construction, the good jobs are not in residential. Residential is a ‘Wild West' where there's lots of misuse of independent contractors. Work tends to be quite temporary. It's not what you would call a ‘good job,'” Belman said.

Short-Term Fix?

The panelists agreed that more needs to be done to promote construction as a career in which workers can earn money while training and be paid a decent wage once their training is complete.

There needs to be more education and marketing on construction careers at the high school level and more state and local initiatives that fund job training in construction for young workers, the panelists said.

However, most of those solutions to address the shortage are long-term fixes, said Mark Richardson, senior industry fellow for Harvard University's Joint Center for Housing Studies. Focusing on immigration may be a “quick fix” for the labor shortage in the short term, he said.

Immigration reform would help provide some type of legal permanent status for the “significant percentage of workers in the construction industry” who are in the country illegally, Associated General Contractors Chief Executive Officer Stephen Sandherr said.

“Unscrupulous employers” in the industry who exploit illegal workers by misclassifying them and paying them much lower wages pose a challenge to the industry when trying to attract and recruit more people, he said.

“A lot of these workers that are misclassified as independent contractors are actually illegal immigrants. I think that's one of the reasons why we need immigration reform. They need to be able to not fear that they are going to be deported by raising their hand and saying something's not right,” Sandherr said. “One of the ways we are going to attract people in the industry and keep people in the industry is to pay them a wage that's a good, decent wage. We need to encourage the enforcement of work classification.”

Money Talks

Belman and Illinois Economic Policy Institute Executive Director Frank Manzo emphasized the need for higher wages in residential construction, if employers want to build their labor force.

“To attract high-skilled workers into the trades, employers can offer higher wages and better benefits. One problem is that too many qualified candidates are going into other industries,” Manzo told Bloomberg BNA Feb. 29. “How can firms attract workers to a residential construction industry that has high injury rates, is dependent on good economic conditions, and may only provide about 1,600 hours of work when other industries like manufacturing or distribution are safer, more stable and offer over 2,000 hours of work a year? Money is typically a good incentive.”

Residential construction contractors also should look at what they're doing that adds to the difficulty of recruiting workers, Belman said.

“One of the reasons they've got what they perceive as a shortage is because workers don't have any reason to stay with them,” he said. “Are they trying to generate what we would consider a middle class job? If they did, then they wouldn't have many issues with their workforce.”

In addition to raising wages, contractors need to invest in training and pay workers benefits if they want to see more qualified workers flock to their construction sites, Belman said.

To contact the reporter on this story: Jewel Edwards in Washington at

To contact the editor responsible for this story: Peggy Aulino at

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