There’s a skills shortage in the construction industry, and not unexpectedly it’s leading to an increase in what tradesmen can charge for their services.
With the housing crisis well into its second decade, the cost of new build houses is having a real impact on how many are being built.
Now prominent quantity surveyors (QS) like Room to Improve’s Claire Irwin saying wages are the ‘biggest killer’ when it comes to high construction costs.
‘Wages are just crucifying builders,’ she said.
‘The wages are really, really high. And that is something contractors are frequently discussing with me – the cost of employing an apprentice.’
Room to Improve’s resident QS Claire Irwin alongside host Dermot Bannon. Ms Irwin says builders are being ‘crucified’ on ‘killer’ wages
Apprentice rates set in the same SEO go from €7.67 in the first year of study to €20.70 in the fourth year.
Ms Irwin continued: ‘The contractor also has to pay for holiday pay, PRSI, USC, they have to add on VAT.
‘So the high construction wage rates, plus all of the taxes, plus all of the holiday pay, plus all of the VAT – it all adds up.’
Carpenters for example are earning up to €500 a day as the high cost of tradesmen drives up building costs, according to two of the country’s best–known quantity surveyors.
But a union representative for the construction sector says wages are fair and simply a response to supply and demand.
Rates in the sector are set by a Government Sectoral Employment Order (SEO) and see craftspeople earn a minimum of €23 an hour, set to increase by another 74c in August.
But high demand means many tradespeople are charging up to three times that figure.
‘Influencer’ QS Shay Lally, whose Instagram account is followed by over 70,000 people, said he agreed ‘100 per cent’ with Ms Irwin.
‘That’s a big reason why things are as expensive as they are,’ he told the MoS.
‘And I think the challenge is, let’s just say you’re a contractor and you have a guy working for you, and he might be the best person going, but if you don’t give him the sort of the money he wants or thereabouts, there’s someone else out there who’s just so busy, who just needs somebody, who will give him that money.
‘So the fear for these [contractors] is, they’ll lose good guys and they’ll essentially just have no crew, or the crew that they have won’t be a good crew.’
Mr Lally said tradespeople working on big projects like housing estates or apartment blocks often work through RCT – ie are self–employed – rather than being paid on a PAYE basis.
‘So they get a fixed price to tile the house or hang the doors or paint the house or whatever, and the rates in that world are getting very, very high as well,’ he said.
‘So you’ll have lads like carpenters or whatever, and they could be getting the equivalent of maybe €500 a day, because the rates are that generous.
‘So if someone’s trying to lure them to do a job in their house or somewhere else, they want higher than what they’re getting where they are, because it’s almost an inconvenience to go and do the other job.’
Mr Lally said it is often the ‘lads on the ground’ that are doing best out of construction projects.
‘I know people might find it hard to believe, but you’ll find if you actually went around and reviewed some company accounts for some builders and electricians and all the various different subcontractors, some of them wouldn’t be making as much money as you might think.’
Quantity Surveyor Shay Lally says: ‘Carpenters or whatever, and they could be getting the equivalent of maybe €500 a day’
Brian Nolan, assistant general secretary with Connect Trade Union representing tradespeople, told the MoS: ‘We don’t need to defend high wages – we need to defend good wages.
‘None of our members are overpaid. They’re paid commensurate with their skills.
‘We would argue that craft workers in Ireland are among the most highly skilled and yet not amongst the most highly paid.’
The union rep said that is proven by the fact that so many Irish tradespeople are working abroad where their skills are sought after and their earning potential is even greater than here.
He is aware of complaints that tradespeople are charging ‘exorbitant’ amounts to come and do a day’s work for people, but said: ‘The market dictates where somebody’s going to go, where they can make a proper earning.
‘They’ll go where the market dictates, and they’ll take the best jobs that give them the most money. That’s understandable.
‘Whether people like it or not, we’ve bought into capitalism. That’s how that one works.
‘We didn’t design it. It’s flawed in many ways, but it’s flawed when you’re the customer and you think you’re paying above the odds.’
Mr Nolan said that, compared to 20 or 30 years ago, there are ‘twice as many people sitting in offices, sitting on computers, designing, drawing, planning, and doing all that they do – and that’s just the way construction has gone’.
He added: ‘But if you were to be fair and balanced about it, you’d have to ask the question – what are all those people getting paid?’
A spokeswoman for the Construction Industry Federation (CIF), which has input in setting the SEO rates, told the MoS: ‘We want to encourage new entrants into the industry by offering good pay and T&Cs.
‘CIF is very supportive of an SEO being in place in the industry because it sets the rates of pay for all workers. The SEO was introduced by the Minister following a recommendation from the Labour Court.
‘Prior to making a recommendation, the Labour Court conducts a thorough examination of the pay in the sector. The Labour Court also takes into account pay across the rest of the economy.
‘Having set rates of pay ensures that all contractors can tender on a level playing field.’