The No. 1 business issue for home builders, remodelers, and land developers continues to be access to skilled labor. According to NAHB analysis of Bureau of Labor Statistics (BLS) data, as of April of this year there were 404,000 open construction sector positions. Not only is this level of unfilled jobs in the construction industry at a post–Great Recession high, the current estimate is the highest ever reading for this data series, which runs back two decades. — Builder
According to Builder, "the intensity of the labor shortage among builders grew more intense during 2018 and 2019." The challenges of this shortage on the construction industry bring higher costs, delays, and lower output on projects. Economist, Robert Dietz, Ph.D. suggests that, "Wage growth in a sector is ultimately limited by productivity gains. If, to attract new workers, wages are required by supply and demand to rise faster than productivity growth, such hiring does not take place." He says this in turn creates a reduction in output within the industry.
Dietz's contention is that a macroeconomic/historical look at the situation provides reasonable answers. He believes that "lower tax rates and lower interest rates will spark additional business investment, which will in turn attract workers and raise productivity."
5 Comments
1) Trickle-down bullshit. Lower tax and interest rates don't spur business investment, they spur financial investment, stock buybacks, etc.
2) Wage growth in construction is limited by developers' voracious profit appetite because ROI is all that matters.
3) There is no labor shortage, there is a shortage of fair-paying jobs in construction (and other fields throughout the country).
4) Aside from jobs that don't pay living wages, any "labor shortages" are due to policies penalizing the immigrants who make up a sizable portion of the construction workforce (a.k.a. labor tourism) - many of who work for a fraction of what US citizens require to live and are not subject to the taxes, insurances, unemployment, and protections (in theory, at least) of citizens.
+++++++ yes
4) You've identified why wages might be so low in some sectors, but especially construction. And if immigrants (you mean illegal immigrants) work for a fraction, it is indeed because they won't pay full taxes, and might have even more benefits (see the recent plan to evict illegal immigrants from HUD housing, which indicates that illegal immigrants are getting subsidized living from the payments of US citizens through taxes) this subsidizing and lack of taxes then keeps immigrant work cheap for greedy businesses to take advantage of, while forcing competition for lower wages. So really, this is using the money of middle-class taxpayers especially to make labor cheaper and more profitable for large corporations. Fix the tax code, and penalize businesses using these practices.
I was told the market would solve all of the problems.... I guess not
Market? Of course not, the US doesn't have a free market. It's been overtaken by crony capitalism which focuses on bipartisan regulations and laws suppressing competition.
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