Pension and Health Insurance Coverage in Construction Labor Markets
Compared to most workers, those within construction are less likely to have important fringe benefits-like a pension plan and health insurance coverage-because even when employers want to offer benefits they face barriers, which limit their ability to offer coverage. For example, the typical construction contractor has fewer than 25 employees; these small employers must bear higher costs in the provision of benefits than their larger counterparts, because the pool of employees over which to spread administrative costs is smaller. Higher costs translate into lower rates of coverage for workers in small firms. Furthermore, employment within construction is highly sensitive to changes in the business cycle as well as the seasons, and thus construction workers are more likely to be unemployed and move between multiple employers during the year. This frequent movement between employers limits eligibility for health insurance and pensions within construction. Finally, the construction industry has always been a gateway to opportunity for immigrants both because of the prevalence of backbreaking manual labor and the basic need for shelter which imparts building trades skills that are portable the world over. Since the 1980s the pace of immigration from Mexico and South America has made Hispanics the fastest growing minority in the U.S. overall and within construction. A key feature of that immigration is the prevalence of documented and undocumented non-citizens. Generally noncitizens are unlikely to have a pension and health insurance whether through limited bargaining power or the greater priority placed on wages, which can be remitted to relatives back home. The greater prevalence of non-citizen-Hispanics within construction has thus meant that overall construction workers are less likely to have benefits coverage.