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Wage gains have slowed, but some sectors are still hot

Mitchell Hartman Oct 31, 2019
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Construction is one of the industries that has seen wages increase. Julian Herbert/Getty Images

Wage gains have slowed, but some sectors are still hot

Mitchell Hartman Oct 31, 2019
Construction is one of the industries that has seen wages increase. Julian Herbert/Getty Images
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Economic growth is slowing, and that’s been reflected in a decline in job creation from 223,000 jobs a month in 2018 to 161,000 jobs a month in the first nine months of this year, according to the Labor Department.

October’s numbers are expected to show a further decline in job creation, thanks in part to the six-week United Auto Workers strike against GM, which temporarily took about 46,000 autoworkers off payrolls.

Growth in average hourly earnings has also slowed from a peak of well above 3% year over year in mid-2018 to 2.9% in September of this year.

But there have been much stronger wage gains in some sectors. Job site Glassdoor reports that construction wages are up 6.1% year over year, pay for warehouse associates is up 5.4% and pay for security guards is up 4.9%.

“Construction has been rebounding with the cuts to interest rates from the Federal Reserve,” said Glassdoor economist Daniel Zhao, “and so you’re seeing a shortage of workers drive up wages in that industry.”

Zhao said wages for workers in warehousing, logistics and transportation are being driven higher by the e-commerce boom and Amazon’s $15 an hour minimum wage, which has induced competitors to raise their wages, too.

And Zhao pointed out there have been out-sized wage gains in the 3.5%-5% range for pharmacy technicians, retail managers and certified nursing assistants — all jobs that pay in the $30,000 to $35,000 range.

“That’s a really good sign that the benefits of the tight labor market are reaching even lower-income workers,” Zhao said.

Higher construction wages are drawing people to the field in Portland, Oregon. On a recent weekday morning, about 100 apprentice electricians filed into classrooms with their notebooks and steaming coffee mugs at Local 48 of the International Brotherhood of Electrical Workers.

“When we complete our five years of training and schooling, we make $45 an hour,” says Amy Haddox, 31, an apprentice electrician. (Mitchell Hartman/Marketplace)

Amy Haddox, 31, takes classes one day a week at the union training center and works on construction sites the rest of the time.

“When we journey out, when we complete our five years of training and schooling, we make $45 an hour,” Haddox said. “It’s pretty great. And then, plus benefits. I have a master’s degree, and before this I was making $24 an hour.”

The union’s been doing well for its members: The base wage for journey-level inside electricians is up by more than 5% since 2018, according to the union’s rate sheet.

“Anybody pretty much who wants to work is working,” said Bridget Quinn, workforce development coordinator at the Portland NECA-IBEW Electrical Training Center. “We have unfilled calls at our dispatch office.”

The construction industry recovered slowly after the Great Recession, and a lot of veteran workers retired or left the field. But Quinn said local building activity has kicked into high gear in the last few years.

“We’ve seen a huge surge in the number of apprentices that we have taken in, lots of overtime if you choose to take it. There’s a lot of hiring incentives,” she said.

The layoffs and downsizing of a decade ago aren’t far from construction workers’ minds, though, even young ones like Ali Foster. She’s 30 and came up as an apprentice carpenter through a program run by Oregon Tradeswomen in Portland. She now works for a local custom remodeling company, Roloff Construction, as a crew leader.

Foster said she knows building is a cyclical industry, and the current hot market could cool off at some point.

“You don’t know ‘what ifs,'” she said. “Roloff Construction was hit pretty hard during the recession, but they were able to find smaller jobs to keep the ball rolling.”

The tight construction labor market is leading to some changes on the job.

Tony Libert, 56, is a father of three and an electrician in Madison, Wisconsin. Since the recession, there’s been a wave of public spending on schools and other infrastructure projects. He said that’s left contractors chronically understaffed.

“So they just push their guys a little bit harder for finishing jobs or using pre-made assemblages made by nonunion people,” Libert said.

As a journeyman union electrician, Libert makes more than $40 an hour, including health, retirement and unemployment benefits. But he said he doesn’t see much new blood coming into the trade.

“Getting young people into the labor market has been extremely hard, because the tech industry — if you can get $15 an hour coding, and you can get $10 an hour as an apprentice electrician, you’re taking the $15 an hour coding,” he said.

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