Are employers crying wolf over labor shortage?

By Robbie Hunter
President, State Building and Construction Trades Council

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Since the first of the year, some contractor and building industry associations have peddled a story that the state of California has fallen into the ravages of a construction labor shortage.

But, is this really true?

If you are an employer who has profited in the past by paying slave wages, by not paying your taxes, by not paying your unemployment insurance or workers comp, by not providing health care and pension benefits to your workers, then the answer is yes, you have a problem. You’re losing your workers to minimum-wage jobs such as the fast-food industry, to car washes, to places that workers know that at least, they will get paid.

As the economy has improved and construction has ticked up, the number of workers employed in the building trades in California increased by more than 286,700 from 2010 to 2017, according to the Bureau of Labor Statistics. Despite the gains, the level of construction employment still isn’t as high as it was 10 years ago. Even more tellingly in a world of supply and demand, construction wages that suffered significant declines earlier this decade have only begun to recover in the past two years.

Now that construction wages are growing, we see expressions of concern about a labor shortage from organizations such as the Associated Builders and Contractors, the North State Building Industry Association, the Sacramento Regional Builders Exchange, the Associated General Contractors and the California Homebuilding Foundation.

These are the organizations that support a human resources policy that has driven workers into the ground, or more precisely, into the underground economy where labor brokers hold all the power. Their goal is to cut workers’ wages as low as possible, to maximize their members’ profits. That’s especially so in the residential construction sector, where unscrupulous contractors have long been able to get away with paying construction workers in cash under the table at $50 to $70 a day—well below minimum wage—with no proper lunch breaks, no overtime, and no health care or other benefits. Better for them that taxpayers pick up those costs, through Medicaid, food stamps and housing vouchers.

It is certainly not labor costs that are driving housing prices through the roof. Speculation, greed and cities with restrictive land use or anti-growth standards are the main contributors to the problem of a lack of affordability. 

Last year, the State Building and Construction Trades Council strongly supported Assembly Bill 1701, a measure designed to end the scourge of wage theft in the California construction industry. The measure, passed by the Legislature and signed by Gov. Jerry Brown, enables the state Labor Commissioner to seek back wages from general contractors for the failures of their subcontractors to pay their workers.

We do not find it surprising that the ABC and others are mounting their labor-shortage campaign on the heels of the passage of this tough new legislation.

While there is a boom in construction, the reality is that fair employers who pay fair wages are competing hard for workers. And they are finding them, with the number of union members employed in private construction in California increasing by 43 percent from 2010 to 2016.

And there are more of these highly skilled and expertly trained workers on the way. Joint labor-management programs account for 92 percent of the 53,000-plus men and women enrolled in state-approved apprenticeships, across all Trades. Last year, the Legislature and the governor approved another piece of legislation, Assembly Bill 1111, that maintains pre-apprenticeship standards in programs for workers from disadvantaged groups who are looking to begin construction careers.

Keep in mind who is pushing the labor shortage story. They are contractor associations, and we know where they get their information—from themselves, in surveys that are conducted of, by and for themselves. And we know what it is they want: to make as much money as they can, which we know sometimes comes at the expense of our members and all construction workers.

Take it from Professor Dale Belman of the Michigan State University School of Human Resources and Labor Relations. He presented a paper to the Michigan legislature last February saying that construction employment only now is returning to a “more normal” level that existed before the Great Recession. Contractor surveys, he wrote, are not based “on a close analysis of the construction labor markets.” He concluded that the construction industry has plenty of workers, enough to get it through the next two years. Belman wrote that if the industry improves its training systems, it will be able “to meet the foreseeable needs of construction labor.”

Which brings us to the present. Now, we see that contractor associations have created what they call the “Go Build” workforce development coalition, including a California version. They say they want “to enhance the image of the construction industry” in the eyes of young people, to get more of them into the industry, and who isn’t in favor of that? They went wrong, though, in making charter members in the coalition out of the ardently anti-labor ABC and the Western Electrical Contractors Association.

The long-term goal of any coalition that includes those groups, whether you’re talking about a shortage or a surplus of workers, is the attainment of their ideological objective. And that is the destruction of organized labor.

The real problem for construction employers who have profited by cheating their workers is that they were so successful at it that they have driven workers completely out of the industry because they could not support their families. These employers should stop crying wolf about a labor shortage and pay their workers for their skill and hard work.

The reality is there is no shortage of workers. But there is a shortage of people that are willing to be used as slaves, paid low wages or nothing at all in the underground economy.

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