TL:DR
The average hourly earnings for production and non-supervisory employees in construction, which covers most onsite craft workers as well as many office staff, increased to $39.24 in July, according to new figures.
The Associated General Contractors of America (AGC) said construction pay rose 5.2% over the past year, compared to a 3.2% gain for production workers in the overall private sector.
The average hourly wage for construction workers is now 21.1% higher than the average for all private-sector production employees, it found.
The news came as construction companies in the country added 22,000 jobs in July and 82,000 over 12 months. Total construction employment in July was 8,343,000 in July, seasonally adjusted.
Ken Simonson, the association’s chief economist, said, “The job gains in construction last month were the most since March, as firms continue to pay a premium to hire qualified workers.
“But any interruption in funding for highways or permitting for data centres would lead to layoffs in several parts of the industry.”
My Thoughts 💭
That last sentence is the kicker! The AI capex and the government infrastructure law is causing the cost of labor to rise tremendously! The immigrants getting deported puts ever more strain on labor supply. Once this AI construction buildout ends I expect labor to fall and the spoils will be spread across other industries and then maybe we will see a turnaround in architectural billings and see some growth in that sector of construction and design. But 63k sats per hour is not too shabby for a days worth of work!
Nice to see people who do real work being compensated well for it.
This could go on for a long time though. The demand for compute is vast, which will lead to developing a bunch more energy projects and other natural resource projects to make it more abundant. That will lead to growth in nearby communities, which will require more construction.
The demand is vast but at what cost? I don’t think we found the equilibrium market clearing price for compute.
The subsidy is massive thus it’s distorting the market.
What do you mean by subsidy? You mean cheap underpriced capital?
The token cost per kWh. Plus the overall lifecycle cost of compute. End users are not picking up the tab yet
Ah, I'd argue that's a symptom of cheap capital. Investors are willing to let the companies operate at losses on vague promises of future rewards
I don’t think the frontier models are profitable yet.
Yet trillions of tokens are being processed daily.
At what economy of scale does this become profitable?
it doesn't need to be if the government can print money and bail you out.
Ok, but energy prices are also artificially high because of all the stifled development.
Yea, I mean labor is tight right now as well - but unforunately if we get someone on the other side of the aisle, we may see much more cheaper H2 labor which could drive wage pressure on current construction workers. Who knows though!
This seems like an excellent path though if one doesn't have a formal education, thats alot of sats.
Worth separating that headline wage from take-home, because a large share of trades work is 1099 rather than W-2.
A sub billing $40/hr pays both halves of FICA — 15.3% self-employment tax on net earnings — with no withholding, so the money has to be set aside and mailed in four times a year instead of vanishing from a paycheck before it's ever seen. Q3's estimated payment is due Sept 15. Before income tax, $40/hr as a 1099 sub is roughly equivalent to a low-$30s W-2 wage once you net out the employer-side payroll tax and unreimbursed tools/truck/insurance.
The wage increase is real, but the W-2 vs 1099 mix matters as much as the number does — and the underpayment penalty is what actually bites first-year subs, not the rate.
I built a free calculator for the quarterly number (no signup, no email): https://smeltworks.com/quartertax/