Business, Construction and Building, Free News Articles, Reports and Studies

Study: Housing Workforce Shortage Is Barrier to Affordability

OAKLAND, Calif. -- According to California's Housing and Community Development Department (HCD), the golden state must dramatically increase the productive capacity of its residential construction sector in order to create enough new housing to improve affordability. However, new research released today by Smart Cities Prevail shows the industry has failed to make the investments necessary to compete for the more than 200,000 new workers necessary to meet this ambitious goal.

Click here to read the report Rebuilding California: The Golden State's Housing Workforce Reckoning (PDF): https://www.smartcitiesprevail.org/wp-content/uploads/2019/01/SCP_HousingReport.0107.pdf

Click here to read the executive summary of the report (PDF): https://www.smartcitiesprevail.org/wp-content/uploads/2019/01/SCP_EXEC.summary_0110.pdf

"The data shows residential construction work is more dangerous, economically risky, and lower paying than most other jobs in our economy," said study author Scott Littlehale. "When you consider these dynamics alongside the industry's aging workforce, its failure to institutionalize investments in apprenticeship training, and a shrinking supply of young workers and immigrants, it is clear why the housing sector is struggling to attract the new workers it needs."

While construction jobs require longer commutes, more flexibility in work hours, and far higher risk of workplace injury and death than other jobs, Littlehale found residential construction workers earn 24 percent less per year than all other jobs on average, and less than half have health insurance coverage through their employer. Wage theft in the industry has grown by 400 percent since 1972. When adjusted for cost of living, California's median construction wage ranks 46th in the United States.

Compounding the problem, Littlehale found, is that the labor pool on which residential construction firms have relied since the 1980s is shrinking. California's stock of young male workers without a college degree has fallen since 2005, and its supply of non-naturalized immigrants has decreased by almost 350,000 between 2005 and 2016.

"Because of its decades-long reliance on a lower-wage, lower skilled workforce, California's housing construction industry finds itself ill-equipped to compete in today's labor market," Littlehale added. "Considering the inherent physical dangers and economic volatility, the work simply does not pay enough to lure workers away from other states or other industries."

While construction requires substantially more pre-employment training than most other jobs, Littlehale notes the residential construction industry has largely avoided institutionalized investments in apprenticeship. The few programs that are offered are managed only by employers and funded on a "voluntary" basis-and produce 90 percent fewer workers than "joint labor-management" programs financed through collective bargaining agreements and prevailing wage laws.

"Housing contractors have no real incentive to invest in training programs that would attach a more stable supply of skilled labor to the industry unless their competitors are doing it too," Littlehale said. "As a result, the industry lacks a training pipeline capable of attaching an adequate supply of skilled workers to residential construction careers."

The housing industry last produced new housing on the scale called for by HCD in the 1970s and 1980s. This was also a period when more residential construction workers were covered by collective bargaining agreements mandating competitive wage levels, fringe benefits, and apprenticeship training standards. But data shows that since then, productivity per unit of labor in construction has been declining, even as it has grown by more than 30 percent on average in other economic sectors.

"As the industry moved away from arrangements that were able to attract, retain and re-supply the industry's stock of skilled labor, it has generally relied on a large number of low wage workers to meet increased production demands," Littlehale observed. "That option no longer exists, so housing contractors need a strategy to attract and retain more skilled workers."

Though the housing sector has focused on regulatory reforms to accelerate approvals of new construction, Littlehale believes such changes are unlikely to affect the industry's overall productivity without addressing the shrinking labor pool and lagging productivity.

"Ultimately, housing builders' reservoir of low-wage, less-skilled labor is not refilling itself," Littlehale concluded. "The industry should consider labor-management cooperation measures like prevailing wage and collective bargaining agreements because they are consistently associated with higher wages, increased apprenticeship enrollment, more production efficiency, and fewer workplace safety problems. By improving labor market competitiveness, wider utilization of these workforce development arrangements would help restore California residential building to the production engine it once was."

Scott Littlehale has authored numerous studies on the U.S. political economy, labor related public policy and the construction industry since 1993. He served on the technical committee of CASA - The Committee to House the Bay Area - between 2017 and 2018. Follow him on Twitter.

Smart Cities Prevail is a leading national non-profit research and education organization focused on the construction industry. Learn more at https://www.smartcitiesprevail.org/, or by following us on Facebook, Twitter and Instagram.

Twitter: @CaCitiesPrevail @FactChecker23 #workforcestudy #constructionjobs

Related link:

This news story was published by the Neotrope® News Network - all rights reserved.

Advertising and Marketing, Business, Construction and Building, Free News Articles, Government

Smart Cities Prevail Launches Multi-State Campaign On Prevailing Wage Laws

SACRAMENTO, Calif. -- Smart Cities Prevail today released a series of new TV advertisements on prevailing wage laws, part of a multi-state public information campaign launching in California and New Mexico.

View the ads: "HT Tran" (https://youtu.be/wdkC_ycI_ec) and "Rebuilding America" (https://youtu.be/n97-XWdayAk).

"HT Tran" tells the story of an Iraq War veteran who came home after being wounded in combat to found the award winning general engineering firm Anvil Builders.

"I wouldn't be alive today if all the guys I served with took shortcuts," Tran says. "Taking care of workers doing dangerous and difficult jobs here at home is no different than taking care of soldiers in the army. Prevailing wage is an investment in well-trained local professionals who know how to get the job done right the first time."

Research has shown that prevailing wage laws disproportionately impact veterans, because they work in construction at higher rates than non-veterans.

"Rebuilding America" highlights the important role that prevailing wage laws play in promoting local hiring and higher quality workmanship on schools, roads and other public projects. Research consistently shows that prevailing wage laws improve the economy and help generate more local middle-class jobs without increasing overall project costs.

"While the well documented economic and community benefits of prevailing wage have been long-validated by respected economists and earned these laws broad bi-partisan support, they are often not well understood by the public at large," said Smart Cities Prevail spokesman Todd Stenhouse. "This campaign isn't just about facts and figures - it's about telling the story of what is at stake and who is really impacted by these laws. More often than not, it's you or someone you know."

Established in the 1930's, prevailing wage laws establish the local market minimum wage on different types of skilled construction work. Typically, the wage includes a base wage, benefits and training contributions - based on surveys of workers performing similar jobs in the community.

In conjunction with the release of the new ad campaign, Smart Cities Prevail has also published resource documents on the impact of prevailing wage laws in New Mexico and California. These studies chronicle the impact of the laws on everything from construction costs to job creation, overall economic output and welfare reliance.

"Reams of peer reviewed data have conclusively shown that when it comes to controlling costs, creating jobs, strengthening the economy and building projects that stand the test of time, prevailing wage offers the best value for taxpayers," Stenhouse concluded.

Smart Cities Prevail is a leading construction industry research and advocacy organization, focused on contracting and labor standards.

More information on us may be found at https://www.smartcitiesprevail.org/ - or on Facebook, Twitter and Instagram.

*PDF LINK: "The Impact of Prevailing Wage Laws on Military Veterans: AN ECONOMIC AND LABOR MARKET ANALYSIS." https://b.3cdn.net/votevets/62350ae9afd6c4c714_0jm6bsc5b.pdf

VIDEO (YouTube):
https://youtu.be/n97-XWdayAk

Related link:

This news story was published by the Neotrope® News Network - all rights reserved.

Construction and Building, Free News Articles, General Editorial, Government, NonProfit and Charities, Opinion and Commentary, Reports and Studies

Open Letter from City Leaders Calls for Prevailing Wages in State Housing Reforms

SACRAMENTO, Calif. -- In an open letter that ran as a full page ad in today's Sacramento Bee, elected leaders from six of California's eight largest cities called on California Governor Jerry Brown and the State Legislature to include prevailing wage standards in state housing reforms. The ad was paid for by Smart Cities Prevail (SCP).

The Legislature is currently considering a range of proposals aimed at combating California's persistent housing affordability crisis.

Click Here to View the Ad (PDF): http://www.smartcitiesprevail.org/wp-content/uploads/sites/24/2017/05/SacBeeAd.pdf.

Smart Cities Prevail (SCP) is a non-profit research organization that focuses on wage policies and contracting standards in the construction industry. The ad was signed by a group of local elected officials from the cities of San Diego, Los Angeles, San Jose, San Francisco, Oakland, and Sacramento.

The ad references ongoing efforts to streamline more housing development - with several proposals under consideration to combat California's persistent housing affordability crisis again this year.

"Real housing reform needs to do more than simply streamline more development," the leaders write. "We need to promote investment in the people who are doing the building, and struggling to pay the rent in our communities."

The ad highlights findings from a new SCP study entitled, "The Value of Linking Good Construction Jobs to California's Housing Reforms (http://www.smartcitiesprevail.org/wp-content/uploads/sites/24/2017/03/SCP_HousingReport.0314.pdf)."

Utilizing Economic Census data and industry standard data analysis, this study highlights how a variety of factors are contributing to California's housing affordability crisis-including significant increases in profits for developers and builders, shrinking wages for blue-collar construction workers, and declining productivity for the construction industry as a whole. It concludes that including prevailing wage standards in state housing reforms would help the industry attract and develop the skills needed to boost housing supply, while also helping to close the affordability gap for working families, reducing racial disparities in pay, and saving taxpayers tens of millions of dollars per year by reducing reliance on public assistance.

"With real blue-collar construction wages down 25 percent over the last two decades, the suggestion that labor costs hinder the construction of more housing supply is simply not supported by the facts or the financial realities of the industry," said study author Alex Lantsberg. "With housing prices and profits soaring, the industry is well positioned to invest in productivity and affordability for its own workforce. We can make good progress towards both objectives by incorporating prevailing wage standards into state housing reforms."

Smart Cities Prevail has also posted today's open letter online. Members of the public who want to lend their voice in support of including prevailing wage in state housing reforms can do so at: http://www.smartcitiesprevail.org/housingpetition/.

Smart Cities Prevail is a leading national non-profit research and education organization focused on the construction industry. Learn more at http://www.smartcitiesprevail.org, or by following us on Facebook (https://www.facebook.com/SmartCitiesPrevail) or Twitter (https://twitter.com/cacitiesprevail).

MEDIA CONTACT:
Todd Stenhouse
(916) 397-1131
toddstenhouse@gmail.com

This news story was published by the Neotrope® News Network - all rights reserved.

Business, Construction and Building, Free News Articles, NonProfit and Charities, Reports and Studies

STUDY: Linking Prevailing Wage Standards with Housing Reforms Would Close Affordability Gap and Save Taxpayer Dollars

SACRAMENTO, Calif. -- A brand new study by construction industry research non-profit Smart Cities Prevail shows that linking prevailing wage standards with proposed reforms to streamline new housing development would close the affordability gap, save state and local governments tens of millions of dollars annually, and disproportionately benefit communities of color.

Read the study entitled "The Value of Linking Good Construction Jobs to California's Housing Reforms" here (PDF): http://www.smartcitiesprevail.org/wp-content/uploads/sites/24/2017/03/SCP_HousingReport.0314.pdf.

Overall, the study notes that it takes 13 percent more workers today to match the residential housing output that California enjoyed just twenty years ago. This steep decline in productivity has been matched by a 25 percent decline in inflation-adjusted blue-collar construction wages (the median wage is just $35,000 per year) and housing prices that have soared as high as 54 percent in the Bay Area.

"A productivity renaissance will be necessary to produce housing units in the numbers that will noticeably shave what Californians pay for housing," said study author Alex Lantsberg. "Studies have repeatedly shown that the best way to realize that goal is by incorporating prevailing wage standards."

Prevailing wage is a minimum wage for blue-collar construction work that reflects local market rates for different skilled crafts. Long associated with stronger economic outcomes and more local hiring, most research shows that prevailing wages have no significant impact on total project costs because they promote higher skilled craftsmanship.

This triggers increases in productivity and efficiency as high as 15 percent, reduced reliance on taxpayer funded public assistance programs, and prevents workforce shortages by helping to fund the apprenticeship programs that are used to meet California's construction workforce training needs.

Using industry standard economic impact analysis, the study notes that if California's multi-family residential construction industry resembled the rest of the construction industry on wage standards, it would:

* Increase incomes of blue-collar workers by more than $1 billion.
* Boost state and local tax revenues by at least $55 million.
* Save taxpayers at least $30 million on public assistance expenditures.

"Fully 40 percent of California's blue-collar construction workers now qualify for taxpayer subsidized housing and these workers are mostly people of color," Lantsberg added. "It's clear that failing to incorporate prevailing wages into reforms that streamline housing development will only exacerbate the affordability gap for the workers who build these units - particularly in high cost coastal communities."

With the Affordable Care Act facing an uncertain future, Lantsberg's analysis shows that 38 percent of full-time, blue-collar construction workers currently have no health care coverage and their Medicaid reliance is twice the national average for non-supervisory production workers.

According to Economic Census data, California's 2014 Affordable Housing Cost Study and other federal data sources, construction wages and benefits comprise just 15 percent of total residential housing costs-substantially less than contractor earnings and developer fees (18 percent), and less than half the cost share of equipment, materials, fuels and purchased services (34 percent).

Importantly, Lantsberg notes that neither labor costs nor materials have driven the increase in California's housing prices. Since 1992 the construction industry's gross operating surplus, or profits, have increased 50 percent more than either materials or construction labor.

"The suggestion that labor costs hinder the construction of more housing supply is simply not supported by the facts or the financial realities of the industry. With housing prices and profits soaring, the industry is well positioned to invest in productivity and affordability for its own workforce. We can make good progress towards both objectives by incorporating prevailing wage standards into a housing development streamlining package."

Alex Lantsberg, MCP, AICP is a Research Analyst with Smart Cities Prevail, a leading construction industry research and education organization. Alex holds a Masters of City Planning from the University of California, Berkeley and was admitted to the American Institute of City Planning in 2013. Lantsberg has co-authored numerous economic impact studies, including research analyzing the economic impact of prevailing wage laws in California and across the country, the public costs of wage and benefit restructuring and the economic impact of minimum wage.

Smart Cities Prevail is a leading national non-profit research and education organization focused on the construction industry.

Learn more at http://www.smartcitiesprevail.org/ or by following us on Facebook: https://www.facebook.com/SmartCitiesPrevail - or Twitter: https://twitter.com/cacitiesprevail.

Paid for by Smart Cities Prevail, PO Box 348766 Sacramento, CA 95834-8766.

MEDIA CONTACT:
Todd Stenhouse
(916) 397-1131
toddstenhouse@gmail.com

This news story was published by the Neotrope® News Network - all rights reserved.