U.S. hourly compensation rates in construction trades

U.S. hourly compensation rates in construction trades

The jobless rate in the construction sector is now only 5.2% Year-over-year earnings in May by all on-site construction workers were +2.6% hourly and +2.8% weekly The highest hourly rate in May 2015 was for electricians ($26.73), but they had only narrow advantages over plumbers and pipefitters ($26.49) In most instances, workers in the lowest-paying cities were earning about half what their counterparts were making in the highest-paying cities

This article sets the scene for what is already a simmering topic and is sure to heat up further in the months ahead - mounting pressure on wage rates in construction.

The jobless rate in the construction sector is now only 5.2%. Rarely, in previous periods of strong building activity, has construction’s jobless figure ever fallen below 5.0%.

Additional construction labor requirements, moving forward, may prove difficult to satisfy since the jobless rate for the economy as a whole is also tight, at 4.7%. The initial jobless claims figure for the latest week ending June 18 was only 259,000. Beating 300,000 on the downside is considered a positive indication of a strong labor market.

Wages, though, have been slow to respond. Year-over-year earnings in May by all on-site construction workers were +2.6% hourly and +2.8% weekly.

Excluding supervisory personnel, the results for construction were +2.4% hourly and +2.9% weekly. Once those figures consistently climb above +3.0%, more analysts will sit up and take notice.

But before anyone starts worrying a great deal about the degree to which wages in construction may leap higher, there is the question of where earnings presently stand.

The latest data on hourly earnings by construction trades appears at the Occupational Employment Statistics site of the Bureau of Labor Statistics (BLS). The most up-to-date findings, which were published in March of this year, are for May of last year. They are based on extensive surveys of employers.

Accompanying Table 1 sets out average hourly earnings results for 10 key construction trades in an admittedly arbitrary listing of 16 major American cities, chosen to achieve good regional representation. 

Below each trade, in brackets, is its code number according to the Standard Occupational Classification (SOC) system. The hourly dollar figures are average (i.e., ‘mean’) base rates and do not include holiday pay or overtime.   

Let’s begin with the national results. For the ten trades, the highest hourly rate in May 2015 was for electricians ($26.73), but they had only narrow advantages over plumbers and pipefitters ($26.49), structural steel workers ($26.32) and crane and tower operators ($26.23).

The lowest hourly rate, nationally, was earned by laborers ($17.57). The next rung up from the bottom was claimed by cement finishers ($20.23).

The remaining trades drew pay checks in a range between $22.00 and $26.00 per hour. 

In a ranking of cities for each of the trades, workers in New York received the most money in seven of the ten worker categories.

The only three instances of ‘trades’ being paid more than in N.Y. were brick masons ($35.55) and laborers ($26.90) in Chicago and electricians ($41.25) in San Francisco.

As for workers whose compensations levels were weakest in each trade, there was greater regional variety, although cities in the south dominated.

Atlanta and Miami, in a tie with four each, combined to account for weakest hourly earnings in eight of the ten job categories.

Atlanta was lowest for cement finishers ($15.15); operating engineers ($18.00); laborers ($14.08); and structural steel workers ($17.87).

Miami was weakest for carpenters ($17.85); electricians ($21.52); plumbers/pipefitters ($19.78); and reinforcing and rebar workers ($18.04).

For the remaining two trades, Phoenix was worst for brick masons ($17.16) and Denver for crane and tower operators ($20.26).

To my mind, in all the trades, there were shockingly large regional disparities between those at the one end of the spectrum versus those at the other.  

In most instances, workers in the lowest-paying cities were earning about half what their counterparts were making in the highest-paying cities.

Although still quite large, the smallest disparity was for carpenters. The average hourly rate for carpenters working in Miami was 56.5% of the level they might have been earning in New York.

The biggest discrepancies occurred for reinforcing and rebar workers and structural steel workers. Reinforcing and rebar workers in Miami received only 40.6% of the pay scale of their counterparts in the Big Apple.

For structural steel workers, it was in Atlanta that their hourly compensation was so minimal compared with New York, 40.8%.

U.S. initial jobless claims:  https://www.dol.gov/ui/data.pdf

BLS Employment Situation report:  http://www.bls.gov/news.release/pdf/empsit.pdf

Occupational Employment Statistics:  http://www.bls.gov/oes/current/oessrcma.htm

TAGS: Plumbing
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