Not Letting a Good Crisis Go To Waste

Wasting no time, the editors of the Wall Street Journal have put in their oar for open borders:

Even before the hurricanes, construction firms around the U.S. reported trouble finding enough workers. The Bureau of Labor Statistics reported 225,000 construction job openings in June, up 30% in the last year and 125% since 2012. According to a survey this month by the Associated General Contractors of America, 86% of firms nationwide anticipate hiring workers in the next year.

The worker shortage is especially acute in fast-growing metro areas in the South such as Atlanta, Houston and Miami. In Texas, 69% of contractors said they struggled to fill positions. About 60% of contractors in the South are having trouble finding carpenters and concrete workers while half need more day laborers.

Older construction workers have left the workforce since the last housing boom. About a third moved to higher-paying industries such as energy and manufacturing. Fewer young men are pursuing the trades or a vocational education, and some can’t pass a drug test.

Big Labor and the restrictionist right say employers simply need to increase wages. But in Texas 57% of contractors reported increasing base pay while a quarter offered bonuses—and they’re still struggling to recruit workers. Between 2013 and 2016, the base pay for a day laborer increased 30% in Houston. Carpenters there earn about $25 an hour, 55% more than three years ago. Large contractors with government contracts can perhaps pay more. But small firms then get out-competed for workers.

Let’s put that in a little perspective. Real wages in construction in the United States are lower than they were 45 years ago:

That decline was mostly due to workers imported from abroad, almost entirely illegally. Do I need to produce evidence that wages in big banks have continued to increase right through the Great Recession despite their having created it? Over time one becomes accustomed to an ever-growing stream of workers who can be paid below what used to be the ordinary expected wage. It’s a great business model as long as the stream continues.

And let’s not talk about the secondary effects. The depressing of wages more generally. The higher spending for roads, schools, sewers, healthcare and so on than would otherwise have been the case.

Meanwhile, the black youth unemployment rate in Houston hovers at around 20%. Sounds like there are plenty of workers available to me.

8 comments… add one
  • Ben Wolf

    In America, some people are too black to employ. So you import workers with a lighter shade.

  • That’s exactly how I see it, Ben. Well-stated.

  • gray shambler

    Too racist to hire black men for concrete work? Unbelievable!

  • Andy

    Completely agree. My brother’s business has a hard time getting good workers in booming Denver. He can and does raise wages somewhat, but there are limits in an industry where competitive bidding is how one wins contracts. Fortunately he’s been around a long time which gives him an advantage over the fly-by-nights that underbid, and hire illegals, recovering alcoholics or people with criminal records (because those are the kind of people you get when wages are low). The next downturn will see those firms die quickly.

    The biggest competition for workers, for my brother at least, is the higher skill levels – estimators, foremen, and specialist carpenters. Particular foremen who need the skills to manage a worksite and the ability to interact with clients. Good foremen are in huge demand and can get a premium wages – many are sucked-up by the bigger firms.

    Drug use and testing is a liability issue required for insurance – in Colorado it’s gotten harder because pot is legal. I’m not sure what to do about people who have skills but self-select themselves out of the employability pool.

  • TastyBits

    It looks like $25/hour is woefully below the market clearing wage. Perhaps $35, $45, or $55 an hour is the correct wage.

    How many buildings are not getting built due to the shortage? Why do these buildings need to be built? Perhaps, a fewer houses being built during the housing bubble might have been a good idea.

    If a place cannot support $55/hour per carpenter, it might not be able to support the buildings built using wage serfs. Of course, free-marketeers never explained how this is possible. (The correct answer is a socialized credit supply.)

    Being a free-marketeer means never saying, “I was wrong.”

  • If a place cannot support $55/hour per carpenter, it might not be able to support the buildings built using wage serfs.

    You have put your finger directly on the crucial point.

  • Guarneri

    “If a place cannot support $55/hour per carpenter, it might not be able to support the buildings built using wage serfs. Of course, free-marketeers never explained how this is possible. (The correct answer is a socialized credit supply.)”

    Actually, I think the free marketer would immediately identify the market interference. The crony capitalist, along with the social warriors, would cheer the socialized credit supply.

  • TastyBits

    The socialized credit supply makes the welfare state possible, and without socialized credit supply, social warriors have to get a real job.

    The free-market requires an honest monetary system, and in a credit backed monetary system, free-marketeers are crony capitalists.

    Allowing foreign countries to hold US government debt ‘adds insult to injury’. (Free-trade requires an honest monetary system, also.)

Leave a Comment