California’s economy is on track for soaring growth post-Covid-19. The construction industry alone is looking at the need for tens of thousands of new homes to satisfy the current demand. Due to this backlog of projects, construction companies are facing an unprecedented shortage of qualified workers.
According to a recent study for Smart Cities Prevail (a pro-union nonprofit), California needs 200,000 more construction workers to meet the housing goals set by Governor Newsom. It’s important to note that the shortage reported in this study refers to professional union labor that offers good benefits and pays a good wage.
Why is there a shortage?
A huge number of construction workers lost their jobs during the recession and the pandemic. Many found employment in other industries, which has contributed to the 200,000 worker loss that the California construction industry has suffered since 2006.
Reportedly, the prevailing union wage can account for 15 to 30 percent of a project’s cost. In order to keep costs low and meet projected budgets, a number of contractors and developers have turned to cheaper, non-union labor. The result is that many building industry professionals are leaving construction for better paying careers in other industries.
Another factor contributing to the labor shortage is, ironically enough, the high cost of housing in California. Construction companies have found it cheaper to bring contractors in from out of state and pay for their short-term housing than to use local contractors who by necessity charge more due to the cost of California housing.
However, some factors leading to the dearth of professional construction workers were in play well before the recent issues of Covid-19, the recession, and the high cost of housing. For many years, the trades were a family tradition. Skills and professional pride were handed down from one generation to the next.
Today, many young people are encouraged by both family and high school guidance counselors to pursue a college track of studies rather than pursue a career in the trades.
Where are we now?
At this point, employers are beginning to recognize that one way to solve the labor shortage is to be willing to pay workers higher wages. Some have been quoted as saying they will pay “whatever it takes” for qualified professionals. This is the best of news for California’s union construction workers, and ultimately for the industry as a whole.