Last month we wrote about how the California economy is heating up. One of the measures of that growth we didn’t mention was the 6.1 percent increase in construction employment over the past year, bringing the total number of workers to 825,000, not including the tens of thousands still hiding out in the underground economy.
The numbers are from the federal Bureau of Labor Statistics which issues a monthly report they call by the acronym “JOLTS”—the Job Openings and Labor Turnover Survey that produces data on job openings, hires, and separations—and the latest data shows the job market in construction is threatening to overheat.
Across some parts of the country, builders and contractors reported difficulty finding new workers. This situation is likely to be aggravated by increased demand caused by the recent spate of hurricanes in the Gulf Coast states, which will soak up construction workers like the black hole at the center of our galaxy soaks up stars.
The West Is Best
The JOLTS report as of July of this year said the national unemployment rate for construction stood at 5.3 percent, a full point above the general unemployment rate. On a regional basis things are much tighter in the West with a 3.3 percent, two full points below the national industry rate, which economists tell us is “full employment” as far as construction is concerned.
While worker shortages haven’t been a serious problem for union contractors in southern California yet, it may become one soon, particularly if the housing market picks up following the adoption of a half-dozen or so “affordable housing” bills recently passed by the Legislature.
This has been a topic of discussion at the Laborers’ Training Trust meetings, where I have the honor of representing the Engineering Contractors’ Association interests. The Laborers’ Train School recently graduated 400 new apprentices to the rank of journeyman and has some 1,400 student/apprentices and journeymen enrolled in their broad curriculum.
Other trades, while not as large as the Laborer’ program, are also adding apprentices to their ranks as well. There are still people in the union hiring halls looking for work here as recent projects are completed. Non-union contractors are having to scramble to find crews, forcing up wages, which normally run 20 percent or more below union scale.
This is likely to continue to be the case if the JOLTS report trend lines from earlier this year continue. We’ll find out soon enough—the next JOLTS report is due out October 11th.
By Brandon Pensick, ECA President
Email: [email protected]