Why We Must Address the Residential Construction Workforce Crisis
To keep California’s historic housing affordability crisis from getting even worse, the residential construction industry must more than double its current rates of production. To do that, it must attract, train and retain at least 100,000 new construction workers.
In fact, to create enough housing to actually drive down prices — rates of production we have not seen since the 1970’s and 1980’s — California must add well over 200,000 new construction workers.
But the housing industry is struggling to meet these goals. Here are a few reasons why:
- Dangerous work: 78% of career construction workers are injured on the job at some point. 
- Economic Risks: Demand for Construction labor is significantly less stable than in other industries—and is especially sensitive to economic downturns or seasonal factors.
- Pay is Not Competitive: On average, residential construction workers earn 24% less per year than other jobs. Less than half have health insurance coverage at work. 
- California construction ranks near bottom: Adjusted for the state’s high cost of living, typical pay for construction workers ranks 46th in the nation. 
- Weak Training Institutions: Residential contractor support for apprentice training programs is mostly “voluntary.” As a result, fewer firms invest in training, and fewer workers are able to access the skills that attach them to careers in the industry.
- Lagging Productivity: Over the last 30 years, labor productivity in residential construction has actually declined. In other industries, it’s grown an average of 31%. 
- Shrinking Labor Pool: California’s supply of working age immigrants and males with a high school degree or less has shrunk since 2005. 
To Rebuild California, we need a strong prevailing wage and apprenticeship standards that boost the competitiveness of residential construction careers and promote stability in the construction labor market.
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- Dong, XS, K Ringen, L Welch and J Dement. 2014. “Risks of a lifetime in construction part I: traumatic injuries.” American Journal of Industrial Medicine. 57:973-983.
- U.S. Bureau of Labor Statistics, National Compensation Survey; Kolmar, Chris. 2018. “These are the jobs with the highest rate of uninsured workers,” downloaded via https://www.zippia.com/advice/jobs-with-highest-uninsured-rate/
- U.S. Census Bureau, American Community Survey, 2012-2016 5-year estimates, Table B24021, and U.S. BEA 2016 Regional Price Parities by State.
- U.S. BLS. 1987-2016 Nonmanufacturing Multifactor Productivity. Downloaded in 2018 via https://www.bls.gov/mfp/mprdload.htm; U.S. Bureau of Labor Statistics, Nonfarm Business Sector: Real Output Per Hour of All Persons [OPHNFB], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/OPHNFB, July 17, 2018.
- Hanson, G, C Liu, and C McIntosh. Spring 2017. “Along the watchtower: The rise and fall of US low-skilled immigration.” Brookings Papers on Economic Activity; U.S. Census Bureau, 2017 American Community Survey 1-Year Estimates, Table B15001