Skilled craft labor shortages in construction? Hmm…Could it have something to do with a decline in wages and unionization?

Lydia DePillis is a business and economics reporter for the Houston Chronicle.  Prior to that she wrote the Washington Post’s “Wonkblog” that focused on economic issues and trends.

Recently, Lydia delved into the issue of construction worker shortages, which have been the subject of much discussion and concern in the construction “boom” areas along the Houston/Gulf Coast region.

If there’s really a problem, what’s caused it? Usually, employers identify a lack of desire on behalf of young people these days to pursue skilled trades, after a generation-long push for kids to go to college instead of trade school. “These jobs, Americans don’t want,” one homebuilder told CNBC last week.

But that’s only part of the answer. The other part requires an understanding of history: Although pay in the construction industry has been rising lately, that comes after a period of long decline, leaving wages substantially below what they were in the 1970s. As for training, employers are now leaning on the public education system to replace what trade unions used to provide, before they were ground down to almost nothing.

Noting that US construction industry wages had barely budged for 20 years, DePillis explains that current construction wages, adjusted for inflation, are about 15 percent less than their peak in 1973.

In today’s dollars, a U.S. construction worker averaged $32.10 an hour in 1973, compared to $27.26 an hour in 2017. And remember, construction workers don’t always have steady work, so their take-home pay can be less than that hourly rate makes it seem; construction laborers have a median annual wage of about $33,000 a year. (In Texas, it’s quite a bit less.)

A big part of that slide in wages: The decline of unions, which represented nearly 40 percent of construction workers in 1973, and only 14 percent in 2016.

But unions did more than just organize for higher wages (which they still do in states where they remain strong, like New York). They also ran a comprehensive training system, largely funded by employers, that kids could enter right out of high school free of charge. After apprenticing for several years, young workers could expect a well-paid job as long as they wanted it.

As DePillis says, “Sometimes, old problems are best tackled with ideas from the past.”

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