Hispanics Comprise 31% of the Construction Workforce

2024-06-17T09:20:07-05:00

Diversifying the construction labor force is a key strategic goal given the ongoing skilled labor shortage. The latest labor force statistics from the 2022 American Community Survey[1] show that Non-Hispanic white people account for the majority of workers in the construction industry (57.5%). However, Hispanics make up close to one-third of the construction labor force (31.1%), followed by Black people (5.1%), and Asian people (1.8%).   The most noticeable recent trend in construction employment is the increase in the number and share of Hispanic workers. From 2010 to 2022, the number of Hispanics working in the construction industry rose from 2.5 million to almost 3.7 million. The share of Hispanics employed in the construction industry grew rapidly over the past decade, from 23.6% in 2010 to 31.1% in 2022. Now close to one-third of workers in construction is Hispanic. Hispanics are overrepresented in the construction industry, as they make up 31.1% of construction employment compared to 18.7% across all industries in 2022. Non-Hispanic White people account for 57.5% which is about the same as across all industries (58.3%). Black and Asian people are underrepresented in the construction industry. The share of Hispanic workers in construction varies considerably by state, ranging from only 2% in West Virginia, Vermont, and Maine to more than 50% in New Mexico, Texas, California and Nevada. Hispanic workers in the construction industry are more geographically concentrated in the Southern and Western states, where a large number of Hispanic people reside. In fact, 54% of the nation’s Hispanic construction workforce is concentrated in three states – Texas (827,000), California (775,000), and Florida (373,000). New Mexico also stands out for registering the highest share of Hispanic people in the construction labor force (64%).  Texas is next on the list, with Hispanic people accounting for 63% of its construction workforce, followed by California at 58%. In contrast, the construction industry in the Northeast region relies heavily on non-Hispanic white Americans. Non-Hispanic White people make up more than 95% of the construction workforce in New Hampshire, West Virginia, Vermont, Maine. Black and Asian people are underrepresented in the construction industry in most states. Black people comprise only 5.1% of the construction workforce, while their share in the US labor force is almost 12%. States with the largest share of Black workers in construction are Mississippi (19%), followed by Alabama (13%), and Maryland (34%). Asian people account for less than 2% of the US construction workforce. However, their share is significant in Hawaii, where 28% of construction workers are Asian. [1] From this post, American Community Survey, PUMS Data is and will be used as the data source for the demographic estimates of construction workforce. Discover more from Eye On Housing Subscribe to get the latest posts to your email.

Hispanics Comprise 31% of the Construction Workforce2024-06-17T09:20:07-05:00

Texas, California, and Florida Lead in Hiring Female Construction Workers

2024-06-10T12:15:33-05:00

In 2022, around 1.29 million women worked in construction in the United States, accounting for 10.97% of the industry, according to the 2022 American Community Survey.  Within the construction industry, women are more likely to be found in such occupations as office and administrative support, management, business, and financial operations. Only 2.8% of women in construction work in actual trade roles.  Increasing the number of women in construction could help address the current labor shortage problem. This post focuses on the number and the share of women working in construction across different states. As of 2022, the state with the largest number of women working in construction was Texas (137,000), followed by California (135,000) and Florida (119,000). These three states accounted for 30% of all women employed in the industry. The larger populations and thriving construction industries in these three states provided more opportunities and higher participation rates for women in construction. In contrast, Vermont had the smallest number, approximately 1,800 women in construction, among all 50 states. Compared to the national average (10.97%), 27 states had a higher concentration of women in construction in 2022. Alaska had the highest share of female construction workers, making up 15.8% of workers in the industry. States like South Carolina, Oregon, and Florida also had a higher concentration of women working in construction, with 14.1%, 14.0% and 13.5% of their workforce, respectively. Discover more from Eye On Housing Subscribe to get the latest posts to your email.

Texas, California, and Florida Lead in Hiring Female Construction Workers2024-06-10T12:15:33-05:00

More Gen Z Entering the Construction Industry

2024-06-03T09:21:44-05:00

The median age of construction workers is 42, one year older than a typical worker in the national labor force, according to NAHB analysis of the most recent 2022 American Community Survey (ACS) data. However, more younger people are joining the construction industry. Despite some improvements since the peak of the skilled labor shortage in 2021, attracting skilled labor remains the primary long-term goal for the construction industry. The median age of construction industry workers varies across states. The color coding in the map above tracks the median age of people working in the construction industry.  The state with the oldest median age (45 years old) is West Virginia, followed by Connecticut, New York, Rhode Island and Vermont, where the median age of construction workers is 44. Construction workers are younger on average in the central part of the nation. For example, half of all construction workers in Utah are under 39. The second data series mapped above is the difference between the median age of construction workers in each state and the median age of all industries. These estimates are reported as the numbers printed on each state. A positive number indicates that on average, construction workers are older than a typical worker in the state labor force.  West Virginia, New York and Rhode Island are the states where the median age of construction workers is 3 years higher than the overall median. On the other hand, a negative number indicates construction workers are, in general, younger than the state labor force.  In South Dakota and Wyoming, the median age of construction workers is 1 year younger than the overall median. Analysis of the age distribution of construction workers over time reveals that Gen Z, those born between mid-1990s and early 2010s, are more likely to enter the construction industry than Millennials, when they were the youngest generation in the labor force.  They are drawn to careers in the construction industry due to factors, like the innovative aspects of modern construction technologies, high cost of college education, competitive wages in construction, job security and potential for growth.  Proving this point, the share of younger construction workers ages 25 under increased to 10.8% in 2022 from 9% in 2015. At the same time, the proportion of workers aged 35 to 54 declined from 71.8% to 67.3% in 2022. The share of older workers aged 55+ rose from 19.1% to 21.8%, as the youngest Baby Boomers entered this age cohort.    The chart below shows that, as of 2022, only about 16.8% of construction workers were Gen Zers.  Around 66.9% of the construction workforce were Millennials and Gen-Xers, who are in the prime working years, compared to 62.2% in overall workforce. The relative greater share of Gen X construction workforce reveals the current challenge. Gen X is a smaller generational group than the Baby Boomers. The share of Baby Boomer Construction workforce is 16.2%, implying that a substantial portion of workforce would retire in near future. Attracting more skilled labor, especially younger generations, remains the primary long-term goal for the construction industry. Discover more from Eye On Housing Subscribe to get the latest posts to your email.

More Gen Z Entering the Construction Industry2024-06-03T09:21:44-05:00

Construction Self-Employment at 23%

2024-05-20T08:14:44-05:00

Close to 23% (or over 2.5 million) of workers employed in construction are self-employed, according to the 2022 American Community Survey (ACS). As industry payrolls expanded in 2022, the share of self-employed inched down. However, the share remained higher than it was in 2019, before the pandemic rattled the labor market. Even though the COVID-19 pandemic boosted self-employment across all industries, construction self-employment rates remain significantly higher than an economy-wide average of 10% of the employed labor force. Compared to the elevated readings of the Great Recession, when over a quarter of the construction labor force was self-employed, the current construction self-employment rates are lower. This is consistent with the counter-cyclical nature of construction self-employment. Under normal circumstances, self-employment rates rise during an economic downturn and fall during an expansion. This presumably reflects a common practice among builders to downsize payrolls when construction activity is declining. In contrast, builders and trade contractors offer better terms for employment and attract a larger pool of laborers to be employees rather than self-employed when workflow is steady and rising. Stacking construction self-employment rates against NAHB’s measure of labor shortage – the share of builders reporting shortages averaged over the nine trades (carpenter-rough, carpenter-finished, electricians, excavators, framing crews, roofers, plumbers, bricklayers/masons, and painters) – reveals that self-employment becomes less prevalent when construction labor shortages worsen. Thus, persistent labor shortages of the last decade is another contributing factor and helps explain why self-employment rates have been trending lower. The COVID-19 pandemic disrupted this natural cycle with self-employment rates rising during the post-pandemic housing boom, when the labor shortages became particularly acute. It is likely that higher self-employment in construction post-pandemic reflects divergent trends within the industry – a faster V-shape recovery for home building and remodeling and a slower delayed improvement for commercial construction that is less dependent on self-employed. It is also possible that some construction employees laid off during the COVID-19 recession of early 2020 became self-employed. Similarly, and consistent with economy-wide “Great Resignation” trends, some workers might have chosen self-employment because it offers more independence and flexibility in hours, pay, type and location of work. Given the widespread labor shortages in construction, securing a steady workflow was less of a concern for construction self-employed in post-pandemic times.  Since the 2020 ACS data are not reliable due to the data collection issues experienced during the early lockdown stages of the pandemic, we can only compare the pre-pandemic 2019 and post-pandemic 2021-2022 data (hence the omitted 2020 data in the charts above). As a result, it is not clear whether self-employed in construction managed to remain employed during the short COIVD-19 recession or recovered their jobs faster afterwards, compared to private payroll workers.  It is also unclear whether the booming residential construction sector attracted self-employed workers from other more vulnerable or slow recovering industries, including commercial construction.  Examining cross-state variation provides additional insights into construction self-employment rates. Montana and Nevada constitute two opposites, with Montana registering the highest (36%) and Nevada showing lowest (11%) self-employment rates in construction. The substantial differences likely reflect a predominance of home building in Montana and a higher prevalence of commercial construction in Nevada.  The New England states are where it takes longer to build a house.  Because of the short construction season and longer times to complete a project, specialty trade contractors in these states have fewer workers on their payrolls. The 2012 Economic Census data showed that specialty trade contractors in Montana, Maine, Rhode Island, Vermont, Idaho, and New Hampshire have the smallest payrolls in the nation with five to six workers on average. The national average is close to nine workers. As a result, independent entrepreneurs complete a greater share of work, which helps explain the high self-employment shares in these states. Discover more from Eye On Housing Subscribe to get the latest posts to your email.

Construction Self-Employment at 23%2024-05-20T08:14:44-05:00
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