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Rising labor costs eat away at construction firms’ profits

June 23, 2022

The clamor over construction’s labor crisis reached a fever pitch this week, with new evidence suggesting historic wage increases for low-skilled site workers are eating into contractors’ profits.

Average hourly earnings for production and nonsupervisory employees in construction rose to $32.19 in May, according to the Bureau of Labor Statistics, a 6.3% increase from a year ago and the highest gain in 40 years.

But increasingly, those higher wages are coming on the bottom rung of the construction employment ladder, with unskilled laborers seeing the greatest wage gains, economists told Construction Dive. That means construction companies pay more for hard-to-find workers, without necessarily reaping the benefits of increased productivity, or profits.

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