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Construction Industry Labor Report 2022: Shortages, Earnings, and Conditions

We interviewed experts currently working in the construction industry, and analyzed data to get a better insight on the state of issues such as, labor shortages, current average wages, and conditions for workers.

After two years of uncertainty during the COVID-19 pandemic, the construction industry rebounded in 2022. Despite the headwinds facing the broader economy, salaries for construction workers have increased as the country opens up and construction projects have restarted in earnest.

This growth, however, has not been equally spread across the country. Some states have seen more wage growth than others, and some specific trades have seen bigger increases. The market and demand for workers are not uniform across the nation, and there is a more pronounced demand in certain areas of the country.

For this report we have interviewed experts at the forefront of the construction industry to get their inside take on the issues facing laborers in the construction industry in 2022. We will give you the scoop on the current causes and effects of labor shortages, what trades are set to earn the most, what areas of the country will see the most job growth, the state of current working conditions, and what is needed moving forward.

After two years of uncertainty during the COVID-19 pandemic, the construction industry rebounded in 2022. Despite the headwinds facing the broader economy, salaries for construction workers have increased as the country opens up and construction projects have restarted in earnest.

This growth, however, has not been equally spread across the country. Some states have seen more wage growth than others, and some specific trades have seen bigger increases. The market and demand for workers are not uniform across the nation, and there is a more pronounced demand in certain areas of the country.

For this report we have interviewed experts at the forefront of the construction industry to get their inside take on the issues facing laborers in the construction industry in 2022. We will give you the scoop on the current causes and effects of labor shortages, what trades are set to earn the most, what areas of the country will see the most job growth, the state of current working conditions, and what is needed moving forward.


Construction Job Openings Increase Since Pandemic


Line graph of the increase in construction job openings in the U.S. since the pandemic

The pandemic sent shockwaves through the labor market, and COVID-related shutdowns suspended many construction projects. As the nation has reopened in the wake of the lockdowns, construction job openings have increased dramatically, but less so than almost every other sector of the economy.

According to data retrieved from FRED from the U.S Bureau of Labor Statistics, construction job openings reached an all-time high in April of 2022, with over 440,000 open positions across the country. May of 2022 had 405,000 job openings and saw 361,000 job positions filled, leaving a deficit of over 79,000 jobs still available and without suitable candidates. At the time of publication, we have seen a decline in June 2022 for job openings (334,000).

There is an acute shortage of workers in almost every sector of the economy, caused partly by the pandemic-induced “Great Resignation” and the mass retirement of the Baby Boomer generation. With labor force participation at all-time lows and a recently booming construction industry, we may continue to see a large deficit of capable construction workers, especially those in the skilled trades, for some time to come.

Reasons for and Impact of Construction Labor Shortages

Labor shortages facing the industry is nothing new. But what are the major reasons behind the shortages this year, and what is the resulting fallout? We spoke to experienced professionals to get their take on this.

Reason: An Aging Workforce

As a whole generation of contractors begin to retire, numbers of experienced workers have started to drop. John Gillett, President of QualityBuilt and Founder and CEO of Foresite Technology Solutions, believes that labor is a greater issue than supply chains challenges by saying, “[...] labor remains the greatest threat to the long-term health of the construction industry. The issue of labor is complex, with an aging workforce, a dwindling supply of experienced workers, and a lack of diversity, all compounding the problem of an overall lack of available workers.”

Reason: Working Conditions

At times, the construction industry can be a difficult place to work. Davin Eberhardt, Founder of Nature at Home, says, “In my experience, poor pay for the harsh working conditions and unstable work has been the most significant contributors to labor shortages. Contractors are pushing to keep labor costs down to ensure profit margins remain high since competition has increased, and customers are demanding lower prices.”

yle Shirley, Owner of Sol Vista Roofing, echoes this by saying, Construction is difficult work and some of our people understandably need an occasional change of scenery, so the industry as a whole has some adapting to do.”

Impact: Delays in Projects

It makes sense that the biggest impact of labor shortages is how long projects are now taking overall. Whitney Hill, co-founder and CEO of SnapADU highlights how not having enough manpower across the industry is resulting in projects not getting started or finished on time. She states that, “We have seen shortages lead to long lead times for our subcontractor base, which can push out job schedules weeks or months. Delays are also happening via the permitting process, which is of course managed by government entities, which are also struggling to retain workers.”

Shirley shares how his company has dealt with labor shortage impacts and the effects; “We are definitely feeling some effects of labor shortages, but important to note that it is not grinding projects to a halt. My company and others in my market have to be more cautious and creative when it comes to finding labor, but it has not resulted in any less work getting done. We have had to delay some projects by a few days at a time due to labor availability. And, we are needing to pay more to our crews resulting in increased labor costs.”

Construction worker building a frame


Construction Professionals Reveal Ways to Attract and Retain Workers


There are many issues pertaining to the reason why there is a labor shortage in the construction industry. One of them is due to the rate of quits. In March 2022, we saw a 20-year high amount of quits, reaching 248,000. On the other hand, some experts believe more can also be done to attract more talent to the industry.

Revolutionize the Way We Work

The pandemic changed the way many people do their jobs, with remote work becoming more commonplace. Hill believes the construction industry could adapt to that. She says, “For desk or hybrid roles in the construction industry, offering remote work options is a perk that can help attract & retain talent.”

Improve the Industry’s Reputation

Some people believe the industry in general lacks prestige in the eyes of many, which in turn makes it difficult to attract new workers. Gillett expresses the following opinion on the matter; “Unfortunately there is a stigma associated with professions that don’t require a college degree.” He goes on to say that “Beginning with the public narrative, it is critical that we introduce the value of a trade career into our education institutions. [...] We can’t underestimate the immense value and need for respect in the industry. Construction is no less than any other career and a vital industry to our overall economy. As a culture, we must understand the importance of guiding young people towards careers that will be most impactful for them - and society as a whole.”

Increase Investment

Shirley feels that higher wages could go some way into increasing the number of laborers in the industry. He comments on this issue by saying that the industry should “Provide the environment new generations of construction workers thrive in. In some cases, that may mean adapting to a new (higher) pay structure, which may also result in an overall increase in construction costs.”

He goes on to say that it is more than just workers’ wages where investment is needed; “But it is not only pay. Investing in worker training, enabling upward mobility in construction companies, and creating a culture where appropriate breaks and days off are not only tolerated, but encouraged.”

Eberhardt agrees with Shirley’s opinions by drawing on similar ideas, listing the following as ways to attract and retain workers: “Job training/advancement opportunities, improved conditions and wages, better employee/contractor loyalty, and steady work.”

Pay being one of the issues raised by the experts we spoke to, let’s take a closer look at the current pay conditions for workers by job role, across the country.


How Much Do Construction Workers Make?


Graphic showing the median annual wage for construction and extraction occupations in 2021

In 2021, the average construction worker made $48,210 per year, slightly higher than the national average of $45,760 for all workers. However, the wages vary between specific trades, the construction field, and the geographic area of the country.

According to the Bureau of Labor Statistics, some of the highest-paid construction trades include elevator and escalator installers and repairers who made an average of $97,860 per year in 2021, boilermakers who made $64,290, construction and building inspectors who made $61,640, electricians who made $60,040, and plumbers, pipefitters, and steamfitters who made an average of $59,880.

Different sectors of the construction industry also have higher salaries on average. Construction workers working in areas like natural gas pipeline construction make $77,780 on average, and coal mining makes $61,690, both significantly more than the average $40,750 that a worker in the residential construction sector takes home in a year.


Which States Pay Construction Workers the Most?


Construction worker pay is not the same in every state or metro area, and some areas of the country pay significantly more than others. The map below shows how much construction workers are paid in each state, and highlights the top 20 states where construction workers are paid the most.

Map of the top states where construction workers are paid the most in 2021

The top 10 states with the highest average pay for construction workers are shown in the table below, along with the percentage difference compared to the national average state wage which is:

StateAverage state wageAverage construction worker wage% difference to average state wage
1. Illinois$61,075$61,930 1.4% higher
2. New Jersey$64,208$60,8805.3% lower
3. New York$71,110$60,41016.27% lower
4. Massachusetts$77,331$59,59025.91% lower
5. Hawaii$78,131$59,21027.55% lower
6. Washington$72,698$54,55028.52% lower
7. Rhode Island$75,604$53,40334.41% lower
8. California$66,157$54,79018.79% lower
9. Alaska$74,226$51,53036.09% lower
10. Missouri$60,163$50,27017.91% lower

On the other end of the scale, there are some states where workers are paid significantly less than their colleagues in other areas. The lowest paying state in the nation is Mississippi, with an average annual salary of just $32,370 or $15.56 per hour. This is 39.3% lower than the average construction worker nationwide. Alabama pays roughly the same at $32,460, while Arkansas workers get slightly more at $33,240 per year on average.

StateAverage state wageAverage construction worker wage% difference to average state wage
1. Illinois$61,075$61,930 1.4% higher
2. New Jersey$64,208$60,8805.3% lower
3. New York$71,110$60,41016.27% lower
4. Massachusetts$77,331$59,59025.91% lower
5. Hawaii$78,131$59,21027.55% lower
6. Washington$72,698$54,55028.52% lower
7. Rhode Island$75,604$53,40334.41% lower
8. California$66,157$54,79018.79% lower
9. Alaska$74,226$51,53036.09% lower
10. Missouri$60,163$50,27017.91% lower

On the other end of the scale, there are some states where workers are paid significantly less than their colleagues in other areas. The lowest paying state in the nation is Mississippi, with an average annual salary of just $32,370 or $15.56 per hour. This is 39.3% lower than the average construction worker nationwide. Alabama pays roughly the same at $32,460, while Arkansas workers get slightly more at $33,240 per year on average.


How Can Construction Labor Conditions Improve?


While demand for construction workers has been high recently, the conditions for workers are by no means perfect, according to the experts we interviewed. There are ways in which the current conditions could be improved. For example, Gillett suggests that “We need to tackle targeted training and upskilling as a priority. Technology and competition are driving changes in the industry, forcing us to adapt and get more comfortable with change.”

Shirley believes that the following is what is needed to improve working conditions; “Understanding worker motivations and adopting new employment standards can certainly help reduce employee churn in the future. Current conditions industry-wide consist of long hours, informal training, and above all a transactional pay-per-job culture. If construction companies can move to adopt a culture of performance-based rewards and take steps to provide career-tracking to their workforce, we think it will result in more loyalty and also better work product.”

Final Thoughts

After almost two years of difficulties and uncertainties, the end of 2022 and 2023 are looking positive for the construction industry. Even when record-breaking inflation is considered, the next six months is predicted to see growth rates of 20.1% in the construction sector, with a continued 10.9% growth in 2023.

Though supply chain issues and labor shortages will still have significant impacts on the construction industry, including project delays, the demand for both skilled and unskilled construction workers will continue to be steady. However, despite the bright prognosis for the industry and the plethora of jobs available, many workers are turning away from construction, leaving jobs unfilled.

Even in a time when project delays due to labor shortages become more commonplace, a steady rise in salaries for construction workers is predicted nationwide, with salary growth set to hit 6%, which will be the highest in 40 years. This could provide an incentive for workers to return to the industry.

Overall, in these times of economic headwinds and uncertainty, construction is one of the better industries to be working in, and the next few years are poised to be good years for workers across the board.

Data and Interviews

Data for this report was gathered from the U.S Bureau of Labor Statistics, and also retrieved from FRED. We reached out to experts currently working in the industry and asked them questions in order to get their take on the issues covered in this report.

Author

Adam Graham

Adam Graham is an industry analyst at Fixr.com. He analyzes and writes about the real estate and home construction industries, covering a range of associated topics. He has been featured in publications such as Better Homes and Gardens and The Boston Globe, and written for various outlets including the National Association of Realtors, and Insurance News Net Magazine.