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11/06/2018

Construction wage gains hit 9-year high, as builders woo workers with $30 per hour pay

Economics 101 has been proven out in the construction sector

By ANDREARIQUIER, source: MarketWatch

Getty Images
Construction workers building a Toll Brothers Inc. home in Boca Raton, Florida.

Construction companies have been ratcheting pay higher to find workers.

Average hourly earnings for construction workers were $30.21 in October, the Labor Department reported Friday. That represented a 3.9% increase in wages compared to a year ago, the strongest yearly gain since mid-2009.

As the housing crisis unfolded, a million and a half residential construction workers were laid off. Industry groups have complained for years that labor is too hard to find, and say that’s holding back a more robust pace of home building.

Higher pay would go a long way to solving that problem, many economists have argued, and to some extent, industry actions over the past year or so have confirmed that idea.

The $30.21 average hourly wage for construction workers is higher than the $27.11 earned by employees in manufacturing.

Annual wage increases for construction workers have increased an average of 3.3% during 2018, double the wage increases enjoyed by factory employees.

In turn, that’s helped employers lure lots more workers: the construction industry added 330,000 jobs over the past 12 months.

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