A Micro Level Analysis of the Relationship Between Changes in Equipment Technology and Wages in the U.S. Construction Industry

A shortage of skilled labor exists in the construction industry. Fortunately, advancement in construction equipment and material technologies, along with modularized components and estimating and scheduling strategies have offset the shortage of skilled construction labor. The construction industry has witnessed a drop in real wages since 1970. Decline in real wages may be attributed to a combination of socioeconomic factors like migrant laborers, fringe benefits, safety procedures, union membership and worker skills. Another factor that may be impacting construction real wages is technological changes over the past couple of decades; including technological changes in construction equipment. There is a growing need to understand how changes in technology are affecting employment conditions in construction. If more could be known about how technology affects wages, the industry could formulate better strategies for future workforce needs. This paper examines the relationship between changes in equipment technology and changes in construction wages with the help of five factors of equipment technology change; control, energy, ergonomics, functionality and information processing. Furthermore, data from the U.S. Bureau of Labor Statistics' Current Population Survey (CPS) is used to examine the effects of computer usage on wages among hourly workers in construction.