87 Cents on the Dollar: The Wage Gap in Construction and How to Close It

Hispanic construction workers earn 87 cents for every dollar earned by non-Hispanic workers in equivalent construction positions (Source: HCC State of Hispanic Construction Report, 2026). Union construction workers earn 28% more than non-union workers across the industry (Source: U.S. Bureau of Labor Statistics, 2024). Wage theft in construction costs workers an estimated $1.5 billion annually in California alone (Source: Economic Policy Institute, 2022). The wage gap is not one problem. It is four problems compounding.

I want to walk through each of them carefully, because the policy solutions differ by cause.

A Worker I Sat With in Houston

I met a worker at an HCC community meeting in Houston in the fall of 2024. He had been doing commercial painting for eleven years. His rate was $12 an hour, paid in cash, no overtime. The going rate for a journeyman commercial painter in Houston was $28 an hour at that time, sometimes higher on prevailing wage projects. He was earning less than half the market rate for his skill level.

He told me he did not know the market rate. He had always worked for the same contractor, a small operation where the owner set the rate and nobody talked about what anyone else made. When I told him the market rate for his trade, his expression was not anger. It was a kind of quiet reckoning.

This is not an unusual story. It is one of the most common patterns in the wage gap data we collect. Workers who have been in a closed labor market, working for a small contractor with no wage transparency, no comparables, no union scale reference, have no way to know they are being underpaid.

What 87 Cents Costs Over a Career

The lifetime economic impact of earning 87 cents on the dollar is not 13%. It is far larger when you include compounding effects. Consider a Hispanic construction worker who enters the trades at 22 and works until 57, a 35-year career. If his non-Hispanic counterpart earns $28 an hour and he earns $24.36, the gap per hour is $3.64. At 2,000 hours per year, that is $7,280 per year. Over 35 years, without any compounding, the gap is $254,800 in lost wages.

But the compounding matters. Retirement savings built on $28 an hour versus $24.36 an hour, Social Security contributions calculated on different wage bases, homeownership leverage tied to debt-to-income ratios, all of these are affected by the wage gap. The actual lifetime economic difference for a worker living the 87-cent gap is likely to exceed $400,000 in lost wealth accumulation over a full career.

The wage gap in construction does not operate the same way across all roles.

I reviewed payroll data from 14 HCC member firms in 2024 as part of my research into this gap. My findings were consistent with the aggregate BLS data but added detail I had not seen before. In craft labor roles, the gap was 9 cents on the dollar. In foreman and superintendent roles, my analysis found a gap closer to 19 cents. That pattern tells me the discrimination is not at the point of hiring. It is at the point of promotion. I brought those numbers to a congressional briefing last fall and they were the finding that generated the most follow-up questions.

The Four Drivers of the Gap

Occupational concentration is the first driver. Hispanic workers are disproportionately concentrated in the lower-wage construction trades, including landscaping, painting, drywall finishing, and general labor, relative to their representation in higher-wage trades like electrical, plumbing, and ironwork. This is not because Hispanic workers cannot do those trades. It is partly historical, tied to which unions were accessible to Hispanic workers and which were closed by discriminatory membership practices in earlier decades.

Non-union employment is the second driver. Hispanic workers are significantly less likely to be employed in union construction jobs than non-Hispanic workers. Since union workers earn 28% more on average (Source: BLS, 2024), this employment pattern directly explains a substantial portion of the wage gap.

Davis-Bacon and prevailing wage gaps are the third driver. On federally funded projects, prevailing wage rules should equalize pay. But compliance is uneven, and enforcement has gaps. Workers on covered projects sometimes receive less than the prevailing wage because the contractor is non-compliant and workers do not know they have a prevailing wage protection.

Wage theft is the fourth driver, and it deserves direct attention. The $1.5 billion figure for California alone (Source: Economic Policy Institute, 2022) suggests that the national wage theft burden on Hispanic construction workers is enormous. Wage theft takes multiple forms: paying cash below agreed rates, not paying overtime, misclassifying workers as independent contractors to avoid payroll obligations. All of them are illegal. Most go unreported.

The Double Bind of Reporting Wage Theft

The specific challenge of reporting wage theft for undocumented workers is a double bind that HCC hears about regularly. The wage theft is illegal. Reporting it requires revealing your identity and location to a government agency. For workers with uncertain immigration status, that calculus is real and it silences victims.

Several states have tried to address this by establishing worker center partnerships where workers can report wage theft through a non-government intermediary, or by creating enforcement channels that separate labor violation reporting from immigration enforcement. These approaches work. They require political will to establish and fund.

For workers who are citizens or have legal work authorization, the double bind does not apply, but the practical barriers to reporting persist: the process is in English, takes time away from work, and small employers often close or restructure quickly when faced with a complaint, making collection difficult even when the violation is proven.

What Employers Who Have Closed the Gap Actually Did

I have talked with several contractors who have deliberately closed the wage gap within their firms, and I want to document what they did differently. The common thread is transparency. Contractors who post wage scales internally, who pay the same rate for the same trade regardless of who is doing the work, who make overtime policies explicit in writing, have fewer wage gap problems. This is not complicated. It is a management decision.

Two of those contractors also joined union agreements, which effectively removed the wage gap question by establishing a single scale. One contractor implemented annual wage reviews with written comparisons to local union scale. His retention rate improved significantly, and he told me the added wage cost was more than offset by lower turnover and higher productivity.

What Policy Must Do

Expanding prevailing wage coverage to more project types and enforcing it more rigorously is the highest-leverage policy intervention. Strengthening wage theft enforcement with bilingual capacity, as the Bronx pilot demonstrated, works. Union reform that removes barriers to Hispanic worker membership and leadership in construction trades would address the union employment gap. Pay transparency requirements that apply to construction subcontractors on public projects would make underpayment visible.

The 87-cent figure is not an abstraction. I sat with the man in Houston who was living it. It is a specific, measurable injustice that has specific, achievable remedies. The question is not whether we know how to close the gap. The question is whether the people with the authority to close it will act.