Saturday, January 30, 2010

2008 Study Revisted:Study reveals that Women and Minorities are least likely to benefit from construction jobs

Todd Swanstrom,
University of Missouri, St. Louis
Second Annual Report
Transportation Equity Network
Public Policy Research Center, University
of Missouri, St. Louis
September 30, 2008

The Road to Good Jobs Transportation Equity Network (TEN)

The Road to Good Jobs examines the employment discrimination of African Americans
and women in the construction industry. But unlike its predecessor, The Road to Jobs, released in 2007, The Road to Good Jobs will also discuss patterns of pay and union membership in construction across the nation’s top
twenty-five metropolitan areas.

Executive Summary
Construction is one of the few industries where workers without a college education can obtain good jobs, with decent pay, good benefits, and job ladders. In 2006 the average wage for construction workers was $18.29 an hour. Th e looming shortage of skilled construction workers presents an opportunity for disadvantaged groups to obtain good jobs without displacing current workers. Our study of the largest twenty-fi ve metropolitan areas in the country, however, found that both African Americans and women were employed in construction at rates well below their participation in the overall workforce.

Indeed, if blacks were employed in construction at the same rate that they employed in the overall workforce in 2006, we estimate that 137,044 more blacks would be employed in construction in our twenty-five metropolitan areas. We also found that women held only between 1 and 9 percent of construction jobs.

On the other hand, Hispanics were employed in construction at rates higher than their percentage in the overall workforce. Not all jobs in construction are “good” jobs, however. Pay varies tremendously across metropolitan areas. Our data shows that a construction worker in Chicago makes almost twice as much per hour ($27.70) as a construction worker in Dallas ($15.65). Th e average Dallas construction worker barely makes enough to support a living wage for one adult and one child. Our study found a strong correlation between the unionization rate in metropolitan areas and the average construction wage. We end with policy recommendations both to increase the participation of women, minorities, and disadvantaged
groups in construction and to improve the quality of jobs in the construction industry. In particular, we point to the tremendous potential for “green” jobs in construction.

Th ere is a pressing need in the United States for more “good” jobs. A good job is one that pays enough to support a family, includes health and retirement benefi ts, has safe and supportive working conditions,and includes job ladders so that workers can advance as their skills advance. Although the proportion of jobs that pay poverty or near-poverty wages has actually declined, the proportion of good jobs, as defined above, has risen. Workers must now cope with a much more unstable job market. Increasingly, workers face longer periods of unemployment and a growing number of dead-end jobs with poor pay and benefits.

A few decades ago, workers used to spend most of their career with one company, oft en unionized, and enjoying high job security, a chance to work their way up job ladders, and solid benefi ts. Good jobs like this are increasingly a thing of the past. Job quality has deteriorated. Between 1983 and 2006 the amount of time a middle-aged worker could expect to spend with the same employer fell by more than one-third.2 As a recent study put it: “Workers entering the labor force can expect to hold fewer steady jobs, to not oft en fi nd themselves on a within-company upward career trajectory, and to receive less on the-job training.” 3 Th e tremendous growth of what one author calls “unjobs” is striking: temporary jobs and outsourcing are two of the fastest growing trends in the American labor market. Th e proportion of
workers who get employer-provided health insurance fell from 69.0 percent in 1979 to 55.9 percent in 2004. During that same period the proportion workers provided pensions fell from 50.6 percent to 45.5 percent.4 Companies are less committed to their workers than they were even a decade ago.

The problem is especially severe for minorities, women, and those with less than a college education. Between 1973 and 2005 the wages of those with a high school education or less fell signifi cantly in infl ationadjusted dollars while those with college degrees or more enjoyed signifi cant increases. In 2005, one-third of black employees and 25.5 percent of women workers made poverty-level wages, compared to “only” 15.2 percent of white male workers. Women, blacks, and Hispanics are less likely than white men to be provided with health insurance or a pension by their employer. In 2004, for example, only 39.7 percent of Hispanics had employer-provided health insurance coverage.

Good Jobs in the Construction Industry
Th e construction industry off ers a supply of good jobs that are increasingly rare in today’s job market. Moreover, individuals without a college degree can get construction jobs that pay well, provide clear job ladders, and include health and pension benefi ts. One of the great advantages of a construction job is that you can “earn while you learn.” Apprenticeship programs pay workers as they acquire the skills to move up the job ladder. For single mothers or others who cannot aff ord to stop working in order to get an education, this is very attractive.

The number of construction job openings is growing, presenting more opportunities for disadvantaged groups to obtain good jobs without displacing current workers. Programs to bring women and minorities into good construction jobs can succeed. As we will see, however, there are two problems with this

Introduction: The Need for Good Jobs

optimistic scenario:
1) evidence of continuing discrimination against blacks and women in the industry;
2) a falling proportion of good jobs in construction.

In 2006 the average wage in construction in the United States was $18.29, well above most jobs in the service sector.6 One reason wages have remained relatively high is that construction is insulated from global competition. Contractors cannot build a new offi ce building or highway in China and then ship it to Chicago. Although skilled construction workers have been hurt by competition from prefabricated components, such as cabinets and windows, it still is basically a labor-intensive industry that relies upon skilled workers to produce one-of-a-kind products adapted to individual sites.

Construction is also a growing industry. It is the only goods producing industry that has enjoyed steady job growth in recent years.7 Th e federal government projects annual openings for 245,900 skilled construction workers each year from 2004-2014.8 Th ese openings are the result of job growth in the industry as well as openings due to retirements and job transfers. Th e Aspen Institute projects zero growth in the native labor supply in the next twenty years.9 Realistically, the industry will have to reach out to immigrants, as well as previously excluded groups, such as women and minorities, to meet the demand for construction workers.

Construction is one of the few industries where workers with relatively little formal education can acquire the skills necessary to earn incomes that can support a middle-class lifestyle. Th e reason for this is that most construction skills are craft skills, learned on the job through formal and informal apprenticeship systems. Many building trades, however, do require basic math skills. Because of this on-the-job training system, construction is one of the few industries today where good jobs are fi lled by workers advancing up job ladders rather than by educated workers recruited from outside. In banking, schools, and hospitals between 82 and 92 percent of “good” jobs are fi lled by workers with at least some college; in construction, only 42 percent of “good” jobs go to college-educated workers.

In the construction industry, the most successful job training programs are run by joint union-management apprenticeship committees.11 Union apprenticeship programs are covered by collective bargaining agreements in each metropolitan area in which a few cents for every hour worked is put into a fund to pay for job training. Each apprenticeship program is run by one of the approximately fourteen building trades (carpenters, electricians, etc.) in each state or metropolitan area. Th e U.S. Department of Labor registers apprenticeship programs that meet twenty-two basic standards. Each apprenticeship program creates a job ladder from apprentice to journeyman, with hourly wages increasing year by year until the top journeyman status is achieved. Th e value of the training to an individual worker in the form of higher
wages, greater safety, etc. has been estimated at between $40,000 and $150,000.12
While many jobs in construction fi t the picture described above and are “good” jobs, the proportion of good jobs in construction is declining. Aft er controlling for infl ation, construction industry wages fell 17 percent between 1973 and 2006.13 Th e percentage of construction workers covered by health insurance is below the national average and the U.S. construction industry has death rates well above those reported for other developed countries.14 Despite the documented need for almost a quarter of a million new skilled construction workers each year, only about 40,000 workers enter construction apprentice programs each year and fewer than that graduate each year.

Th e causes of the deterioration of good jobs in construction are complex but probably the most important factor is the declining union presence. Th e unionization rate in construction in the U.S. fell from 50 percent in 1966 to only 14.2 percent in 2005.16 Th e declining unionization rate has resulted in lower skill levels in construction and lower wages. Even the Business Roundtable, founded in 1972 to oppose construction unions, recognizes that underfunding of job training in construction by open-shop contractors is a serious problem.17 An association of nonunion firms has been formed to provide training but the research shows that joint union-management apprenticeship programs enroll 70 percent of the apprentices, have higher completion rates, and produce more skilled journeymen.

In short, the construction industry presents an opportunity for disadvantaged groups to gain access to good jobs, lift ing up not just individuals but whole communities. Th is opening is threatened, however, by the declining presence of good jobs in the construction industry. We now turn to how these issues play out in the twenty-fi ve largest metropolitan areas in the nation. Are women and minorities gaining access to construction jobs? Are good jobs in construction disappearing?

Findings on Job Inclusion
First, we examined the extent which minorities are employed in the construction industry. We assumed that minorities should be employed in construction jobs at about the same percentage as they are in the general workforce. Th e percentage diff erence between the proportion in the general workforce and the proportion in construction we call the “employment gap.” A positive number indicates that employment in construction for group in question falls below their participation in the general workforce. A negative number indicates employment at a rate above their participation in the general workforce. (For details
about our methodology, see the Appendix.)


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