The USA is one of the largest markets for the construction industry, which employs over 6 million people and generates nearly 1 trillion dollars in revenues every year. As the labor accounts for nearly 48% of the cost of a new home, for most homeowners and landowners, worker wages are a strong determiner of the cost of home’s construction. Given the high variation from state to state, the U.S. Department of Labor Bureau Statistics’ 2016 study provides some useful information about average construction worker wages in different states. Considering the fact that a home is one of the biggest investments most people make in their lives, this study and the corresponding map can prove invaluable in helping you choose the ideal state for your home and potentially save thousands of dollars in the cost of construction.
Considering the wide berth of jobs construction workers perform, it is no surprise that their wages are a major contributor to the cost of a construction project. Construction laborers are involved in a construction project from its inception to the very end. They are involved in clearing and preparing the construction site, using power tools and aiding heavy machinery operators. During the construction process, they are responsible for erecting scaffolding, operating cement mixers and digging trenches. In the final phases, they play a vital role in removing debris and rubble and finishing the final site.
Delving into the U.S. Department of Labor Bureau Statistics’ study, some trends are immediately noticeable. In general, the hourly wages are lower in the southern states, as is observable from the list of top 10 states with the lowest worker wage:
|Top 10 lowest wage states||Average wage|
While a number of factors such as minimum wage laws, working conditions and the role of unions heavily influence the average wage, the south’s accessibility for immigrant laborers is a major factor in the lower hourly wage. Obviously, there are exceptions, with California having a considerably high hourly wage due to its prevailing wage laws and booming metropolitan areas.
In the northern United States the general trend seems to lean towards higher wages as visible in the top 10 highest wages states:
|Top 10 highest wage states||Average wage|
The presence of major metropolises is also a strong influence in pushing the hourly wage up due to a strong demand for construction workers in urban areas. Harsher weather also drives up the cost of labor as workers have fewer months to complete projects, often resulting in overtime.
The average hourly wage is $18.22, corresponding to $37,890 per annum with 20 states averaging above the national average. The average wage for your state is a direct influence on how much a contractor will quote you for a project. An excellent example is California, where the prevailing wage law significantly raises the cost incurred to contractors for quality labor. This raises the final cost of projects by 11% according to some estimates, meaning a difference of nearly $32,000 for an average home.
All in all, the variation in wages is an important factor in determining the cost of your dream home. With such large variation from state to state, it is important to budget according to the nuances of your particular area. As new policies regarding the construction industry and immigration come into play, labor costs will become an increasingly relevant discussion when it comes to home construction.