California Construction Wages Sink Below 1970s Levels

Summary

  • American construction workers make 5$/hour less than they did in the early ‘70s
  • Experts debate whether trend is a result of increased immigration or de-unionization of labor
  • Union membership has declined from 4 in 10 to 1 in 10 in the same time period

A recent report by the LA Times highlighted the fact that after adjusting for inflation, today’s construction workers make $5/hour less than they did in the 1970s.

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Amidst protectionist rhetoric from the Trump administration calling for increased border security to combat falling wages, the report sought to determine the cause of the decline.

While no firm conclusion is reached, the article identifies two causes: an inability to maintain union labor and an increase in immigrant labor.

Ruth Milkman, a sociologist who has studied the history of construction in California, claims that wages were declining decades before there was an influx in migrant labor.

She says the trend began with an effort to undercut the higher wages and greater benefits that come with union labor. As the unions began losing this battle, the aggressive moves to offer cheaper labor from non-union firms were further expedited by an influx of immigrant labour.

However, not everyone feels that the anti-union trend came first. Business manager Hart Keeble sees incoming latino immigrants as a catalyst for non-union contractors to begin undercutting union wages.

According to the article, the percentage of immigrants working in construction in California has climbed from 13% in 1980 to 43% today.

While some point to this figure as clear evidence that immigration has eroded American jobs, other employers note that Americans aren’t interested in these jobs anymore.

Rick Judson, a board member at the National Assn. of Home Builders claims that his industry has been “de-glamorized,” leading to immigrants taking up the jobs that Americans no longer want.

While California may be experiencing some of the steepest wage declines, nationwide construction wages have not increased either.  

The St. Louis Federal Reserve Bank found that construction wages have risen from around $4.54 in January of 1970 to $26.33 as of January 2017. After adjusting for inflation, this works out to a drop of about $0.43 over the almost 50 year period. 

Do you have thoughts on the state of construction pay? Share them with us below. 

Source: LA Times