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The construction industry's labor shortage forced one business owner to raise hourly wages to $25 and pay $250 bonuses for working at least 30 days — and he's even started offering health insurance.

Matthew Messer typically manages his business from an office, but on Thursday, he was on a customer's roof re-installing their solar panel system.

This is work his crews would normally handle. But lately, he's had trouble finding enough workers who can do the job, he said.

"The single biggest thing holding back the growth in my business is bringing on experienced labor," said Messer, the owner of New York Solar Maintenance.

Construction and maintenance companies like Messer's have struggled to keep pace with the surging demand for homes and home improvements during the pandemic. To lure more workers, some have started offering higher wages and improved benefits.

The construction industry lost one million workers during the few months that the industry was shut down at the start of the pandemic, before it was classified as essential. The industry has yet to win back a fifth of the workers who left or were laid off during that period, according to CNN, and will need to hire more than 430,000 workers this year to meet demand.

Messer found that raising wages alone wasn't enough to attract and retain skilled workers.

In addition to bumping hourly wages to $25 — a 40% increase since the start of the year — he began paying $250 to employees who stayed for more than 30 days and offered another $250 for employee referrals. He also began offering healthcare coverage to employees, a benefit that he said was uncommon in the industry.

Many older, more experienced workers took early retirements during the pandemic and the number of younger applicants has ebbed, Messer said. This trend has been years in the making as the number of young people attending trade school or seeking jobs in a trade has dwindled, according to NPR.

As competition heats up for construction workers, some companies are poaching talent from others, said Ross Smith, a salesman at RL Rider Remodeling, a residential remodeling company in Lansing, Michigan.

"There's a lot of competition for skilled carpenters," he said. "You need to watch your butt because other guys are coming for him."

Smith's company has raised wages for its lowest-paid employees by around $4 hourly to $17 since the beginning of the pandemic and began offering employees life and health insurance, as well as 401(k)s.

In spite of the labor shortage, Smith projects his company will generate $3.5 million in revenue by the end of 2021, which would mark a nearly 60% increase from the company's 2020 revenue. And the company is still seeing a months-long backlog in remodeling jobs even after raising its prices. "We're almost turning customers away," he said.


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