The US economy added only 20,000 jobs last month, according to the Labor Department’s latest jobs report, marking a sharp slowdown from a streak of monthly gains in the hundreds of thousands. The unemployment rate, however, fell from 4.0 to 3.8 percent, while the number of people employed part time for economic reasons decreased by 837,000 to 4.3 million, following a sharp increase in January attributed to the federal government shutdown that month. The return of furloughed federal employees also contributed to the decline in the overall unemployment rate.
The number of new jobs fell far short of economists’ predictions, which were in the range of 170,000-180,000. Employment in fields like professional services and health care continued to increase apace with recent trends, but the construction sector cut 31,000 jobs and manufacturing added only 4,000. Employment in other industries like retail, leisure, and hospitality stagnated.
The contrast with other recent months is even more striking as the numbers of new jobs created in December and January were both revised upward slightly, to 227,000 and 311,000 respectively. This sudden swing from robust to lackluster job growth is difficult to interpret as it may signal a slowdown be just a blip in the data, the New York Times notes:
January’s payroll gains were exhilarating. February’s numbers were disappointing. Together they offer a potent reminder that each monthly employment report from the Labor Department captures just a moment in time. Longer-term trends are what matter, and the streak of job growth continues to set records. …
Still, as Carl Tannenbaum, chief economist of Northern Trust in Chicago, said: “This is a disappointing report. I don’t think there’s any way to sugarcoat it.” Rising wage growth is good for workers, but combined with soft payroll growth, he said, “it’s a signal we need to be cautious with the U.S. economic outlook.”
With the tightest labor market in decades, US employers in most industries are having a hard time filling roles. One sector that is especially hurting for workers is construction, where the labor shortage coincides with growing demand for housing and commercial development in American cities large and small. There’s a lot of work to be done, but not enough people to do it.
At the same time as unemployment is historically low, however, many Americans are underemployed, not looking for work, or lacking in marketable job skills. Some cities are now looking at the construction worker shortage as a chance to help improve the skills, incomes, and employability of underserved populations. The New York Times took a look at what these cities are doing in a recent feature:
Facing a tight labor pool, developers, public officials and community organizations are using commercial projects to provide residents with careers in construction. Together, they’re making an effort to recruit men and women from impoverished neighborhoods or challenged populations, such as former prison inmates. In booming markets like San Francisco, Denver and Miami, where gentrification is squeezing affordable housing, demand for these types of programs is growing.
The training programs are also occurring in smaller markets. In Milwaukee, for example, Gorman & Company, an apartment developer, has teamed up with city, state and community agencies to give former inmates on-the-job training restoring dilapidated, tax-foreclosed homes, which are then rented to low-income earners.
In a new report, the Massachusetts Department of Public Health finds that construction workers made up nearly one quarter of workers in the state who died from opioid-related overdoses between 2011 and 2015. Workers in the farming, fishing, and forestry occupation (mostly fishing) had a similarly high rate of overdose deaths compared to the general population, while warehouse, transportation, maintenance, food service, and health care support workers also died from opioid overdoses at above-average rates.
The study, funded by the US Centers for Disease Control and Prevention, found a noteworthy gender gap in the occupational profiles of overdose victims. Most of the construction workers counted in the study were male, and men in the construction, agricultural, and material moving occupations experienced opioid-related deaths at a higher than average rate for male workers in Massachusetts. Among women, however, the highest rates were among healthcare support and food preparation/service workers.
A common thread among the occupations with high rates of overdose deaths is a greater propensity for workplace injuries in these industries, the report notes:
The rate of fatal opioid-related overdose was higher among workers employed in industries and occupations known to have high rates of work-related injuries and illnesses. This finding is consistent with previous research documenting common use of prescribed opioids for management of acute and chronic pain following work-related injury. The rate was also higher among workers in occupations with lower availability of paid sick leave and lower job security. More in-depth research is needed to characterize the potential contribution of these factors to opioid misuse and overdose.
Experts and advocates for occupational safety in Massachusetts tell the Boston Globe they’re not surprised by these findings:
In the latest sign of the tight US labor market giving candidates the upper hand, many construction contractors in the US are now offering cash signing bonuses to skilled craft workers to sweeten the value proposition for joining their team, Jim Parsons reported at the Engineering News-Record this month:
“Signing bonuses are not new, but they are becoming more prevalent,” says Jeff Robinson, president of compensation consulting firm PAS Inc. Unlike the common practice of providing what he calls “mobilization pay” to compensate for relocation costs, contractors now are offering one-time bonuses ranging from a few hundred dollars to upwards of $1,500 per worker.
According to Robinson, a foreman might be offered as much as $3,000, although there may be an expectation that the person will bring other workers along to join the employer’s workforce. “The advantage of a bonus is that it’s a one-time payment that doesn’t affect base pay,” he says, adding that the incentives usually include a 60- to 90-day employment requirement before they can be collected.
The 2017 survey of workforce shortages by the Associated General Contractors of America reported that nearly a quarter of contractors used bonuses for craft personnel because of difficulty filling positions. The trend appears particularly strong in areas where labor demand is extremely high.
Construction is often thought of as a low-skill occupation where one’s qualifications depend more on strength and stamina than knowledge and experience, but in fact it employs a range of skills, while contractors, like most employers, prefer to hire experienced workers if they can, especially for delicate construction tasks that require high levels of skill and craftsmanship. Construction workers are in high demand as commercial and residential building is booming in many parts of the US, and so these workers are becoming harder to find and more expensive to hire.
The Home Depot, the US’s largest home improvement retailer, announced last Thursday that it would donate $50 million to a decade-long project to train 20,000 Americans, including veterans, returning military service members, high school students, and disadvantaged youth, as construction workers, USA Today reported. The donation is part of the company’s corporate social responsibility efforts, but there’s also something in it for Home Depot:
Sales at the nation’s largest home-improvement retailer are dampened if contractors and partners can’t find enough workers to undertake projects. Sales to plumbers and other tradespeople comprise 40% of the company’s revenue, [Home Depot CEO Craig] Menear says. The initiative, he says, also builds on the company’s donation of $250 million through 2020 to provide housing to veterans. Soldiers and veterans will make up about 15,000 of the 20,000 construction workers turned out by the training program.
They could make a noticeable dent in a big problem. There were 158,000 job openings in construction in December, up from 140,000 a year earlier. Eighty-four percent of contractors surveyed by the National Association of Home Builders (NAHB) and Wells Fargo in December cited availability of workers and cost as their most significant problems last year, along with rising materials prices.
The announcement comes at a time when many large US employers are taking high-profile steps toward developing the workforce of the future. Lowe’s, the main competitor to Home Depot, recently announced a partnership with Guild Education to help its employees complete training and apprenticeship programs for skilled trades such as carpentry, plumbing, and appliance repair—fields in which the labor market is expected to face a gap of 500,000 workers by 2026.
Although women make up a small fraction of its membership, the ironworkers union has secured for them one of the most generous leave policies for pregnant women in the US, BuzzFeed’s Cora Lewis reported on Monday. The International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers, which represents about 130,000 construction tradespeople in the US and Canada, announced that members of the union who become pregnant will be entitled to six months of paid maternity leave to be taken prior to delivery, on top of six to eight weeks of postpartum leave:
“The challenges of physical work associated with the ironworking trade create unique health challenges that can jeopardize a pregnancy,” the union said in a statement announcing the benefit, noting that paid maternity leave “is virtually unheard of in the building trades.” The numbers put maternity leave for iron working women on par with corporate employees at tech companies like Etsy, Adobe, Spotify and Cisco. Netflix and the Bill and Melinda Gates Foundation are among the only companies that offer workers more paid parental leave, according to data gathered by Care@Work, which specializes in family benefits.
While women account for just 2,100 members of the union, changes in technology, workforce demographics, and attitudes toward gender roles mean that women’s share of the workforce in some traditionally-male fields is growing. As employers in other sectors have discovered, construction firms may find this new maternity benefit less costly than replacing female employees who drop out of the workforce to raise children; research has shown that women are significantly more likely to quit if their employer does not offer family-friendly policies like parental leave and flexibility. Bill Brown, CEO of Ben Hur Construction and co-chair of the Iron Workers labor-management working group, told BuzzFeed that he considered the benefit an investment in retaining women employees:
The US economy added 235,000 jobs in February, while the unemployment rate fell to 4.7 percent from 4.8 percent the previous month and wages grew 2.8 percent over February 2016, according to the latest report from the Bureau of Labor Statistics. The strong jobs report means the Federal Reserve is likely to raise interest rates when its leaders meet next week, the New York Times reports:
The overall economic momentum and optimism was given an extra push by February’s unusually warm weather, with almost a quarter of the jobs — about 58,000 — coming from construction alone. Manufacturing and mining also bounced up. Over the past three months, including revisions announced Friday, monthly job growth has averaged 209,000, while year-over-year wage growth jumped up to 2.8 percent. … At the same time, jobless claims are near a 44-year low, the stock market is surging, and consumer spending is growing, bolstering the case for those who argue the economy is strong enough to withstand a rate increase.
While declining unemployment is good news for the economy, the Times notes that employers are experiencing “acute labor shortages” and having to compete more aggressively for candidates: