Construction jobs, wages on the rise

Construction continues on O'Hare International Airport's modernization program.

A slow but steady recovery in real estate development and public infrastructure projects has pushed demand for workers who pound nails, drive excavators and manage such operations to its highest level in years.

Construction unions in the Chicago area are starting to take on new apprentices, and a few officials say all of their members will be employed as the industry gears up for the summer height of the 2015 construction season. Some trades workers who hung up their hardhats after work dried up are coming out of retirement to take advantage of new opportunities, they add.

Wages are increasing, too, albeit at sluggish rates, and are likely to increase as labor markets tighten.

“We're finally out of the depression years. We had four years, five years where we had up to 50 percent unemployment,” says Tom Villanova, president of the Chicago and Cook County Building and Construction Trades Council, a union group that represents construction workers. “We're not fully recovered from that, but by this spring and summer we should be on the way.”

Last August, the month when employment in the seasonal industry peaks, 139,600 people worked in construction positions in the area, according to the U.S. Bureau of Labor Statistics. It was the best summertime showing since 2009, when contractors were shedding positions rapidly as the global economy melted down.

The employment total in August was up more than 15 percent over the post-recession summertime trough in June 2012. But the jobs picture still is a long way from the peak of 2006, when nearly 190,000 people had positions in the industry.

New apartment towers and office buildings, an expanding industrial sector and big public projects such as the state tollway authority's capital improvement program are driving the growth. The value of all construction contracts inked last year in the area was close to $10.6 billion, an 18 percent jump over 2013, according to Dodge Data & Analytics, a New York research firm.

“With the amount of deal flow and activity in the industry, there's a need for people. The whole industry is in a search for people,” says Rick Mattioda, president of Leopardo, a contractor based in Hoffman Estates.

The company, which has 400 local employees, will hire 20 managers and supervisors this year, Mattioda says, as well as an unspecified number of blue-collar employees. The firm is eyeing talent at other contractors, and “we know competitors are doing that with our team.”

UNION LEVERAGE

Wages, meanwhile, are starting to tick up as more people get jobs, companies poach from each other and at least some leverage swings back to unions during contract negotiations.

The average wage for blue- and white-collar construction jobs in both union and nonunion positions hit a high in 2013, the latest full-year numbers available, of $1,303 per week, according to the Bureau of Labor Statistics. It's a 1.2 percent gain over 2012 and up 7 percent since 2010, the post-crash low point.

“When contractors are bidding work and bidding all kinds of work, they're going to be more inclined to give an increase than if they don't have any jobs or if there's 50 percent unemployment,” Villanova says.

Some unions anticipate all their members will have jobs as the season picks up this year. “We figure we'll have full employment in the spring,” says Robert Boskovich, president of the Iron Workers District Council of Chicago and Vicinity.

Unions that operate training programs also are adding apprentices again.

Around 60 apprentices started Sheet Metal Workers Local 73's program last year, the first class since 2009, according to business manager Rocco Terranova. The big electrical workers union in the region expanded the size of its 2015 apprenticeship class to 75, almost double the 40 trainees in 2011, when the union restarted its program after more than two years off.

“It started slow because we still had guys out of work,” says Frank Cunningham, recording secretary at the International Brotherhood of Electrical Workers Local 134. “But it's building up again.”

Jeff Raday, president of Rosemont-based McShane Construction and chairman of the Builders Association, a local industry group, says employers are keeping close tabs on where they'll find future employees in a growing market.

“I think labor is in the forefront of everybody's minds,” he says. “We're all planning ahead for it.”

Source: Crains Chicago