Construction Industry Feels Healthcare Squeeze

One of the biggest challenges facing construction firms is the spiraling cost of medical benefits. A survey by industry consulting group EFCG, Inc. finds that healthcare represents 9 percent of a firm’s total labor costs in 2005. A review of companies with unionized employees, conducted by the Construction Labor Research Council, finds the average hourly cost for health and welfare benefits in 2005 to be $4.82, a 43.5 percent increase in five years; union wages grew only 17 percent during the same period. Construction companies feel the squeeze acutely in a tightening labor market. If too much of the cost increases are passed to employees, companies may lose workers; if costs are incurred, profitability issues may occur.