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Home Publications Blogs Beat the Press It's So Hard to Find Good Help: Businessweek Edition

It's So Hard to Find Good Help: Businessweek Edition

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Friday, 10 May 2013 14:12

Businessweek tells us that homebuilders would be building more homes, if only they could find qualified construction workers. Hmmm, that must mean that wages for construction workers are soaring as the shortage causes employers to bid up wages in an effort to grab workers away from competitors or hold on to their current workforce.

That's not what the data say. According to data from the Bureau of Labor Statistics, after adjusting for inflation the average hourly wage in construction has risen by just 0.9 percent in the five years from 2007 to 2012. Note that this a total increase of 0.9 percent over these five years, not an annual increase. If there is a labor shortage, it's not showing up in wages for some reason. (Of course the unemployment rate for construction workers was reported at 13.2 percent in April, which also does not seem to indicate a labor shortage.)

The more obvious explanation for the fact that construction remains depressed is the near record vacancy rates. Presumably many of these empty homes will have to be filled before builders get more aggressive about building new ones.

Comments (5)Add Comment
Who Woulda Thunk It, Markets Only Work in One Direction
written by Last Mover, May 10, 2013 4:28
Market prices only work in one direction when leaving employers who refuse to pay them to come back.

The problem results largely from an exodus of workers from the industry after the housing bubble burst. Experienced construction workers lost jobs. And many found new work — in commercial building or in booming and sometimes higher-paying industries like mining and natural gas drilling — and aren't eager to come back.

Hispanic immigrants, largely from Mexico, who had filled jobs during the boom were among those who left the industry and, in some cases, the United States.
brilliant
written by David, May 10, 2013 6:56
Thanks, Dean. Hearsay rules far too much of the media stream. Luckily we have you to notice what others (supposedly expert) ignore.
...
written by Chris Engel, May 11, 2013 6:56
It makes me sick to see people cheering on the bump in housing and the stock market.

Haven't we done this dance before?

An inflated wealth effect is no way to run an economy. We need to rebuild the middle class and stop taking everyone for a ride on whatever bubble of the decade it is that makes people ignore the stagnant wages of middle class.

The 90's .com boom was a nice distraction, and Greenspan's Housing bubble and home equity-credit card bonanza helped offset the "come down" from the tech-binge, err i mean boom.

And what now? We're just going to play the same game and re-inflate the Dow to nominal point record highs and show double-digit YoY housing gains.

We can't keep doing this, can we? Fewer and fewer people are actually invested this time around in either housing or equities -- and the bond market is saturated to say hte least (good luck finding yield, and better luck trading off a bond for a gain in this environment) -- there's nowhere to go! The _only_ real choice we have now is to actually deal with the systemic problems Reagan created through deregulation and dismantling of the middle class -- problems that were easy to forget amidst stock market booms and housing market revolutions.

I've never been one to just call for doom all the time, but I see it in so much of the data, I see the political climate, the international scene (particularly Europe).

Well, at least we got Dean and Last Mover to provide a little snark and comedic relief amidst all this chaos.

++
What Type of Shortage = What Type of Talking Points
written by James, May 11, 2013 10:32
Shortage of manufacture workers, laborers bc we already depress our wages so low that the wages r NO longer competitive, then change law to bring in even cheaper labor. Blame no ones in this country willing to work! Those lazy folks.

For manufactured shortage of doctors, lawyers,investment bankers, blame LOW wages that DON'T attract or retain talents. Blame overwhelming regulations onto doctors so doctors don't want to comply and leave the field.

So, for laborers, blame goes to lack of workers.

For high-paid doctors and bankers, blame goes to burdensome regulations and lack of more compensation.

Media have gone to sufficient jaunkets provided by the .01% to know what to write.
...
written by watermelonpunch, May 11, 2013 2:56
Everything involved in this topic just makes me shake my head so fiercely I can't even be bothered to try & count the ways, let alone name them here, in which it all screams C*R*A*Z*Z*Z*Z*Z*Y!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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