After a breakthrough year for wage hikes in 2001, construction workers have seen slightly lower increases during 2002. But rates still rose more than 4% for both union and open-shop workers, bettering most increases during the 1990s.

ENR's 20-city average union wage, including fringe benefits, for 19 skilled crafts is up 3.8% over a year ago. This is down slightly from the 4% annual increase won by this group of workers last year. Building laborers saw a 4.1% increase this year, compared to a 4.5% hike in 2001.

(Source: Bureau of Laobr Statistics)

Wages increases for nonunion workers are also being reeled in this year, according to a survey conducted by Personnel Administration Services, Saline, Mich. The construction industry's largest open-shop wage survey shows that 1,300 nonunion contractors expect to see wage increases average 4.2% this year for their 94,351 craft workers. This will be down from a 4.8% wage increase given last year and a 5.3% hike in 2000. "Everybody is being pretty conservative," says Jeff Robinson, PAS president.

The most conservative employers are in the Northeast. Open-shop contractors in New England say they only expect wages to increase 4% this year, after climbing 5.2% in 2001. In New Jersey and New York, open-shop contractors are looking for a 3.9% wage increase this year, the lowest tracked by PAS. Last year, New Jersey and New York firms granted a 5% wage increase.

Across the country, nonunion electrician journeymen earned an average wage, including fringes, of $23.10 an hour last year. Bricklayers earned $22.80 and carpenters $19.72. Foremen for these three crafts earned $27.39, $26.61 and $24.01 an hour, respectively.

Many workers for large open-shop firms also enjoy profit-sharing plans. Of the nonunion firms reporting more than $50 million in annual revenue, 73% offer their workers a profit-sharing plan. Nearly two-thirds of the firms in the $10-million to $20-million revenue range offer profit sharing. About one-fifth of the firms earning less than $1 million in annual revenue offer profit sharing.

On the union side, wage increases reflect a "weakening market," says Robert M. Gasperow, executive director of Washington, D.C.-based Construction Labor Research Council. In 2002, CLRC tracked a 4.2% increase for union wages, including fringe benefits, in the first year of the current contract. Last year, union wages increased 4.6%.

Wage stability is also increasing with the growing trend toward longer-term contracts, says Gasperow. While three-year agreements were a rarity a decade ago, they are now the norm. In addition, one-third of new agreements are for four-year terms, which were virtually unheard of in the 1990s, he says.

Union workers in the Middle Atlantic fared better than other areas, with 5.1% first-year increases. The East North Central region saw 4.4% hikes, but an uncertain market in Illinois kept hikes there in the "high 3% range," says Ray Hawkins, labor relations director for the Associated General Contractors of Illinois, Springfield. "There is concern for the amount of work [ahead]," he says. "Some union halls still have people on the bench."

The economic downturn also has hurt benefits. Health-care costs have risen, while health and welfare investment funds have performed poorly, says Steve Clark, executive director of AGC Northern California, Concord. "We're doing it on a one-year basis," he says.

But training programs will not suffer because they had a funding reserve, according to Clark. Wage negotiations netted increases of between 3 and 3.5% earlier this year in his region of the country.