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Silicon Valley Labor Shortage: Is it BS or Greed

California contractors are crying about a labor shortage, but its really a cheap labor shortage

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by Guest Post on
Mar 22, 2019

Since the first of the year, some contractor and building industry associations have peddled a story around the state that California has fallen into the ravages of a construction labor shortage.

But, have we really?

If you are an employer who has profited in the past by paying slave wages, by not paying your taxes, by not paying your unemployment insurance or workers comp, by not providing health care and pension benefits to your workers, then the answer is yes, you have a problem. You’re losing your workers to minimum-wage jobs such as the fast-food industry, to car washes, to places where workers know they will at least get paid.

As the economy has improved and construction has ticked up, the number of workers employed in the building trades in California has increased by more than 286,700 from 2010 to 2017, according to the Bureau of Labor Statistics. Despite the gains, the level of construction employment still isn’t as high as it was 10 years ago. Even more tellingly in a world of supply and demand, construction wages that suffered significant declines earlier this decade have only begun to recover in the past two years.

Now that construction wages are growing, we see expressions of concern about a labor shortage from organizations such as the Associated Builders and Contractors, the North State Building Industry Association, the Sacramento Regional Builders Exchange, the Associated General Contractors, and the California Homebuilding Foundation.

These are the organizations that support a human resources policy that has driven workers into the ground, or, more precisely, into the underground economy where labor brokers hold all the power. Their goal is to cut workers’ wages as low as possible, to maximize their members’ profits, especially in the residential construction sector, where unscrupulous contractors have long been able to get away with paying construction workers cash payments under the table at $50 to $70 a day – well below minimum wage – with no proper lunch breaks, no overtime and no health care or other benefits. Better for them that taxpayers pick up those costs, through Medicaid, food stamps and housing vouchers.

While there is a boom in construction, the reality is that fair employers who pay fair wages are competing hard for workers – and they are finding them.

Last year, the State Building and Construction Trades Council strongly supported Assembly Bill 1701, a measure designed to end the scourge of wage theft in California in the construction industry. The measure, passed by the Legislature and signed by Gov. Jerry Brown, enables the state Labor Commissioner to seek back wages from general contractors for the failures of their subcontractors to pay their workers. We do not find it surprising that the ABC and others are mounting their labor-shortage campaign on the heels of the passage of this tough new legislation.

While there is a boom in construction, the reality is that fair employers who pay fair wages are competing hard for workers – and they are finding them, with the number of union members employed in private construction in California increasing by 43 percent from 2010 to 2016.

And there are more of these highly skilled and expertly trained workers on the way. Joint labor-management programs account for 92 percent of the 53,000-plus men and women enrolled in state-approved apprenticeships, across all trades. Last year, the Legislature and the governor approved another piece of legislation, Assembly Bill 1111, that maintains pre-apprenticeship standards in programs for workers from disadvantaged groups who are looking to begin construction careers.

The real problem for construction employers who have profited by cheating their workers is that they were so successful at it that they have driven workers completely out of the industry because they could not support their families. They should stop crying wolf about a labor shortage and pay their workers for their skill and hard work.

The reality is there is no shortage of workers. But there is a shortage of people that are willing to be used as slaves, with low wages and often not being paid at all in the underground economy.

Robbie Hunter is president of the State Building and Construction Trades Council of California. He can be contacted at

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