RELEASE: The Public Cost of Low-Wage Jobs in California’s Construction Industry

UC Berkeley Labor Center

FOR IMMEDIATE RELEASE
June 8, 2021
Contact: Van Nguyen, vann@berkeley, (415) 506-8054

 
Study: Families of nearly half of all construction workers in California are enrolled in a safety net program

BERKELEY, CALIF. – A new report by the UC Berkeley Labor Center highlights the public cost of low wages and few benefits in a large part of California’s construction industry.

Construction is a large and vital industry in California, accounting for $107 billion in personal income in 2020, or about $1 out of every $25 of total statewide earnings. The industry is often associated with highly paid jobs. But in fact, in both California and nationally, the construction industry is separated into two subsectors with strikingly different working conditions: a high-wage, often unionized nonresidential construction sector, and a low-wage, often exploitative residential construction sector.

The study, by Ken Jacobs and Kuochih Huang of the UC Berkeley Labor Center, finds that almost half of the families of construction workers in California are enrolled in a safety net program at an annual cost of over $3 billion in public funds. By comparison, just over a third of all California workers have a family member enrolled in one or more safety net programs.

“There is an ongoing debate in California about labor standards requirements as part of housing policy,” noted co-author Ken Jacobs, chair of the UC Berkeley Labor Center. “This study addresses an important consideration that has been largely absent from the debate: the public costs of low wages and few benefits in the industry in the absence of such standards.”

Study details and findings:

  • Almost half the families of construction workers in California are enrolled in at least one safety net program to bridge the gap between their wages and the cost of supporting a family; this comes at an annual cost of more than $3 billion in public funds.
  • Working families in the construction industry are one-third more likely than all working families to participate in one or more means-tested safety net programs in California.
  • Construction workers account for almost 9% of the total safety net expenditures for all California working families.
  • One in four construction workers (26%) in California lack health insurance, more than two and a half times the rate for all California workers (10%).
  • The report examines utilizations of the five largest means-tested safety net programs: Medicaid; Children’s Health Insurance Program (CHIP); basic household income assistance under Temporary Aid for Needy Families (TANF); Earned Income Tax Credit (EITC); and Supplemental Nutrition Assistance Program (SNAP).

“The high utilization of safety net programs and lack of health care for many workers are a clear illustration of the poor wages and working conditions in a large part of the construction industry,” said Jacobs. “It underscores the importance of unions and laws like prevailing wage to uphold standards and ensure workers can make a decent living.”

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The UC Berkeley Center for Labor Research and Education (Labor Center) is a public service project of the Institute for Research on Labor and Employment (IRLE) at UC Berkeley.