Report: Social safety net supports state construction workers
Many construction jobs in Connecticut don’t pay enough to support a family, according to new research from the Labor Center at the University of California, Berkeley.
The study, “The Public Cost of Low-Wage Jobs in the Connecticut Construction Industry,” found that 39% of Connecticut’s construction workers have a family member enrolled in at least one of the five largest social safety-net programs: Medicaid subsidized health care, the Children’s Health Insurance Program (CHIP), welfare cash assistance known as Temporary Aid for Needy Families, the earned income tax credit, and SNAP, the Supplemental Nutrition Assistance Program.
Annually, $229 million in state and federal funding supports the 20,000 construction-worker families enrolled in those programs in Connecticut.
“We want families to be able to survive on what they earn in their jobs,” said Ken Jacobs, one of the authors of the study. “This is a cost to the public, and it’s a real marker that shows just how far the job quality has deteriorated in a large part of the industry.”
Analysts say it’s critical that the post-pandemic economic recovery be focused on sectors that provide steadier, higher-paying employment. So far, construction is the only industry that has gained jobs in Connecticut since January 2020.
The Connecticut findings were one component of a larger study, commissioned by the United Brotherhood of Carpenters and Joiners of America union, which found similar trends in other states and nationwide. In the United States, the proportion of workers in construction with a family member enrolled in social safety net programs was the same as Connecticut’s: 39%. That figure across all industries was 31% nationwide and 29% in Connecticut.
“Connecticut reflects what we’re seeing in the rest of the country, which is that a large part of the construction industry is ‘low road’ practices: low pay, few benefits, lots of cash pay and other violations of labor and employment laws,” Jacobs said.
Matt Capece, attorney for the carpenters union, said, “Contractors need to stop
subcontracting to crooked businesses that abuse their workers and turn a blind eye to taxpayers who subsidize their poor treatment of the workforce.”
But there are plenty of contractors who “do what they’re supposed to do,” said Don Shubert, president of the Connecticut Construction Industry Association. “They pay people properly, pay their taxes and provide good benefits.” Still, there are others who circumvent the rules to gain an advantage in the market, he said.
“Construction is a highly competitive industry in which projects are frequently
awarded on the sole basis of the lowest bid,” the Berkeley study found. Between 12.4% and 20.5% of construction workers are either misclassified as independent contractors — which allows companies to avoid providing certain benefits and protections — or paid under the table, according to researchers. “These practices drive a ‘race to the bottom’ in the industry, which degrades job quality and leaves many workers unable to support themselves and their families.”
Said Shubert: “It’s very hard to see really good contractors that do everything right sitting on the sidelines.”
Projects on tap
New funding for infrastructure, from both the state and the federal government, is expected to add many more jobs in the construction sector in the coming years.
In an emailed statement, Gov. Ned Lamont’s spokesman Max Reiss said: “The Lamont Administration continues to take significant steps to support the construction sector like investing hundreds of millions of dollars in transportation across the state through recent approvals from the state bond commission.” He added that Lamont “has been out front on the need to put federal funding to work on infrastructure, which will create and support thousands of jobs in our state for things like clean water, green energy, and fixing aging bridges.”
Public works construction projects require contractors to meet certain wage requirements and to provide payroll certification on a regular basis, Shubert said. “You won’t see a lot of this mischief,” like misclassification or under-thetable pay, when it comes to infrastructure projects, he said. But Shubert and others are concerned that spending on large planned infrastructure projects in Connecticut could face delays.
In the meantime, Shubert said he’s concerned that historic state unemployment reform, passed with widespread support last year, could incentivize more bad behavior in the construction sector. Businesses in the construction sector are among those that will see their unemployment taxes rise as a result of the legislation, he said.
“If your unemployment taxes are going to double, what do you think some of these people are thinking? It’s like an incentive to misclassify people,” he said, which could lead to more construction workers relying on the social safety net. “It’s just going to make this matter a lot worse,” he said.
Reiss responded: “The unemployment reform we passed last year was supported by members of both parties, organized labor, and the business community. It will shore up the historically underfunded unemployment trust fund for generations, providing certainty to businesses, claimants, and policymakers.”