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According to the latest figures from the Bureau of Labor Services, the average salary for a construction worker is $49,280, or $23.69 per hour. Construction workers are a crucial part of the labor force across the country, and the industry is expected to grow through the end of the decade. Without a formal education requirement, construction work can be a viable option for anyone uninterested in getting a college degree right after high school.

That said, construction labor can be grueling. The job is physically demanding and at times dangerous. You’ll need to consider your physical limitations before pursuing a career in construction work.

Knowing what your income will look like may be the most important consideration of all. We’ll break down the average construction worker starting salary, as well as their typical responsibilities and required skills, below.

What Do Construction Workers Do?

Construction crews work on building sites for new homes, multi-family units, commercial buildings, roads, and bridges. Following detailed plans, construction workers are responsible for taking apart old structures and erecting new ones.

Depending on the job site, construction workers may operate heavy machinery, use hand tools, and perform plumbing and electrical tasks.

Construction work requires significant strength, endurance, and tolerance for extreme temperatures. The industry also has one of the highest rates of injuries on the job, so construction laborers must be familiar with safety protocols.

Construction Worker Job Responsibility Examples

What kinds of things might you be responsible for as a construction worker on a job site? Here are some examples:

•   Removing debris

•   Loading and unloading materials

•   Assembling bracing, scaffolding, and other temporary structures to help with the construction

•   Operating heavy machinery and using hand tools when building and taking apart structures

•   Digging trenches, compacting earth, and backfilling holes

•   Directing traffic

•   Driving work trucks (may require a CDL, or commercial drivers license)

•   Measuring and cutting materials

•   Conducting minor plumbing, electrical, and carpentry work

Construction Worker Skills

Though you don’t need a secondary education to be a construction worker, you’ll need to learn specific skills. You might learn some of these on the job:

•   Ability to use tools and operate machinery

•   Plumbing, electrical, carpentry, masonry, concrete, roofing, drywall, and/or demolition know-how

•   Knowledge of various safety protocols

•   Basic math and measurement

•   Hand-eye coordination

•   Physical strength and energy

In addition, construction workers must be able to problem-solve on the fly and must embrace teamwork. This is not a job for introverts!

How Much Do Starting Construction Workers Make?

Construction worker entry-level salaries vary by state, but you can expect pay to be on the lower end when just starting out. The bottom 10% of earners in the industry bring home about $31,510 per year.

If you’re entering the construction industry with a degree, you will likely make more starting out. With an education, you might go straight into construction management. The bottom 10% of construction managers earn $64,480 a year. The average annual salary is $104,900.

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What Is the Average Salary for a Construction Worker?

The average salary for a construction worker in 2022 was $49,280, but rates vary significantly across the country. The average hourly rate for a construction worker is $23.69 per hour. Total income is about the same whether you get a salary vs. hourly pay.

As you’d expect, areas with a higher cost of living (think California, New York, and Hawaii) generally have more competitive pay than areas with a lower cost of living (states like Alabama, Mississippi, and Arkansas). But no matter where you live, a budget planner app can help you keep tabs on your spending and saving.

How much do construction workers make in California? $61,710, on average. In New York, the mean salary is even higher, at $63,830 a year. But it’s Massachusetts where construction workers make the most money on average: $67,780.

Check out the following table for additional state insights:

💡 Quick Tip: Income, expenses, and life circumstances can change. Consider reviewing your budget a few times a year and making any adjustments if needed.

Pros and Cons of Construction Worker Salary

Being a construction worker has some advantages, but there are also drawbacks to consider:

Pros

•   Higher-than-average salary: The average salary for someone without a college degree is just over $37,000. Construction workers earn more than $9,000 a year over that, without any formal education — and without any student loan debt.

•   Job growth: The job market is projected to grow by 7% from 2023 to 2033, meaning there should be ample opportunities available.

•   Flexibility: Construction jobs are available across the country. If you want to relocate somewhere else, you shouldn’t have trouble finding a job.

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Cons

•   Difficult work: Construction labor can be physically demanding. It may lead to injury and illness, and you can leave job sites tired and sore each day.

•   Less money: Construction workers make significantly less money than construction managers. (A money tracker can help you take control of your finances.) If you’re able to get a bachelor’s degree in construction management, you may earn more money over your lifetime.

•   Long-term career options: As you age, you may become less equipped to keep up with the physical demands of the job. This could force an early retirement, right when you should be in your earning prime. You may instead need to look for a work-from-home job for retirees to ensure you have enough income until you’re eligible for Social Security benefits and other retirement income.

Recommended: Should We Raise the Minimum Wage?

The Takeaway

Construction workers can make decent money over the course of their careers, and you won’t have to take out a student loan to get a degree to land a job. However, the work can be exhausting and lead to injury. Weigh all the pros and cons carefully before starting a career as a construction worker.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

How much do most construction workers make?

How much money a construction worker makes depends on where they live and their level of experience. However, the average construction laborer brings in $49,280 a year.

Who is the highest paid construction worker?

Massachusetts has the highest paid construction workers, with an average salary of $67,780.

What job pays the best in construction?

Pipeline transportation of natural gas is the highest paying job in construction, with laborers earning $94,640 a year on average. Other high-paying construction jobs include electric power generation, transmission, and distribution; construction support services; construction work for medical and surgical hospitals; and rail transport construction.

Photo credit: iStock/damircudic

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A bond option, like any option contract, gives the contract holder the right to buy or sell an underlying asset (in this case, a bond) at a specific price and time.

Although bond options are generally considered less risky than stock options, they still typically carry higher risk than more traditional investments.

Like all options, bond options are derivative securities, used by investors to bet on the direction of an underlying security. Understanding what bond options are and how they work can help you understand these risks and determine whether bond options make sense for your portfolio.

What Are Bond Options?

A bond option is a legal contract to buy and sell underlying bond assets, usually through a call option (the option to buy an underlying bond) or a put option(the option to sell a bond) at a specific price (known as the strike price), at or before a specific expiration date.

For example, an investor might purchase a bond call option with a strike price of $900. The level value (also known as “par value”) of the underlying U.S. government bond is $1,000. Let’s say market conditions push the value of that bond up to $1,100. In that scenario, the option holder has the right to buy the government bond at $900 — even as the value of that underlying bond now stands at $1,100.

Investors typically trade bond options on over-the-counter exchanges. Bond options on U.S. Treasury bonds can sometimes be found through specialized brokers or financial institutions that offer derivative products.

Pros and Cons of Bond Options

There are benefits and drawbacks to incorporating bond options in your portfolio.

Pros of Bond Options

Higher return potential. A well-executed options strategy can potentially increase a trader’s gains on a particular investment. Bond options can also be used to protect against downside risk. Investors often use bond options as a hedge against higher-risk investment strategies.

Risk hedging. Bond options investors can leverage derivative contracts to take advantage of interest rates and other short-term drivers of investment performance in the market. Investors can also lean on bond options to take advantage of pricing variations in options pricing, or to position their portfolios ahead of major geopolitical events (e.g., presidential elections, potentially big Federal Reserve policy decisions, or major recessions and other powerful economic forces).

Cons of Bond Options

The risk of unlimited investment loss. Although call options provide a buyer with the potential for unlimited gain if the underlying security rises in value, the seller of a call option faces the risk of unlimited potential loss, since the price of the underlying asset could theoretically continue to rise.

Should the underlying assets plummet to zero, the seller of a put option could face substantial loss, as they would lose the difference between the strike price and the asset’s zero value.

The risk of losing money quickly. As options are short-term investment instruments by nature, investors need to have extensive knowledge of near-term price movements and also be aware of the potential for loss when pursuing gains through options trading.

That means all options investors must master two key trading objectives — knowing the right time to purchase an options contract and knowing when to sell that contract, or cut losses by allowing the contract to expire without exercising the option to buy or sell by the expiration date. Although allowing an option to expire may sometimes be the best strategy, it can still result in the loss of premium and fees, which may add up over time.

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Types of Bond Options

Bond options offer investors the right to buy or sell (via calls and puts) an underlying investment security at a specific time and at a set price.

Call Option Bonds

With a bond call option, if the price of the underlying bond rises, the contract holder (or buyer) can earn a profit by exercising the option to purchase the asset at a lower price and then selling it at the higher market price. A call option is in the money if the strike price is lower than the current market price of the underlying bond.

Conversely, the seller of a bond option hopes that the price of the bond stays below the strike price. If the bond price rises above the strike price, they would be required to sell the bond at loss for the lower strike price if the buyer exercises the option.

While a call option bond buyer stands only to risk the premium paid for the option, a call option seller, as mentioned previously, could face significant losses if the price of the bond rises significantly above the strike price.

Bond Put Options

While an investor who expects the bond’s price to increase might purchase a call option on that bond, an investor who expects the bond’s price to decrease might purchase a put option.

In this scenario, the holder is hoping the price of the underlying bond will fall below the strike price of the bond put option, so they can sell the bond for more than it’s worth, realizing a profit.

Conversely, bond put option sellers take on the risk that the bond’s price will decline. If the bond’s value falls below the strike price, the seller is obligated to buy it at a loss. However, their maximum loss is limited since a bond’s price cannot drop to zero like a stock.

Understanding Price Movements

Both of the above scenarios assume that the price moves in the direction the trader had hoped. What a bond investor strives to avoid is being on the wrong side of an options trade, selling below market rate or buying at an above-market rate.

For example, if an investor anticipates that bond prices will decline due to future market conditions, they may purchase a put option. If the face value of the underlying bond option were $1,000, a bond put option may give the contract holder the right to sell the option contract at the strike price of $900 — on or before the expiration date.

If bond prices fall, and assuming the underlying bond is now valued at $870, that bond option investor can still exercise the sale of the options contract at the strike price of $900, even though the bond’s value is lower. That can result in a profit for the investor.

Embedded Bond Options

Embedded bond options are features within certain bonds that grant either the bondholder or issuers specific rights under certain conditions. Examples of embedded bond options include:

•   Call options, which allow the issuer to redeem the bond before maturity

•   Convertible provisions, which allow the bondholder to convert the bond into equity

•   Floating-rate provisions, which adjust the bond’s interest rate based on changes in a benchmark rate

Callable Bond Options

Callable bond options come with an embedded call feature that allows issuers to redeem the bond before maturity at face value. These options are often used if the issuer expects interest rates to fall, which allows them to refinance at a lower rate.

Callable bond options offer flexibility, but they also face the risk of being called early. This prevents the investor from collecting interest payments against the full life of the bond.

Bond Options Pricing

Given all the variables, including the current price and future price of a bond, volatility levels, interest rates, and time to expiration, it can be very complicated to properly price a bond option.

Investors rely on several mathematical formulas for this, including the Black-Derman-Toy Model and Black’s Model (an elaboration of the well-known Black-Scholes model used for options pricing).

All of those options pricing models are complex, but they all rely on a few primary factors that determine the investment value of an options contract:

•   The market price of the asset that underlies the option (a.k.a. the spot price)

•   The current intrinsic value of the option

•   The time until the option expires

•   Volatility

For a bond option, interest rate movements are also a key determinant in pricing.

The Takeaway

Options traders may use a bond option as a hedge against economic volatility in key areas, such as interest rates and bond yield rates. Depending on your strategy, a bond option can be a useful portfolio management tool.

Investors who are ready to try their hand at options trading despite the risks involved, might consider checking out SoFi’s options trading platform offered through SoFi Securities, LLC. The platform’s user-friendly design allows investors to buy put and call options through the mobile app or web platform, and get important metrics like breakeven percentage, maximum profit/loss, and more with the click of a button.

Plus, SoFi offers educational resources — including a step-by-step in-app guide — to help you learn more about options trading. Trading options involves high-risk strategies, and should be undertaken by experienced investors. Currently, investors can not sell options on SoFi Active Invest®.

Photo credit: iStock/PeopleImages

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