Source: Morning Market Tidbits, BofA Merrill Lynch

 

Wage growth for construction workers is historically low; Let’s see if we can figure out why:

First, home production has been relatively slow, which should be expected following a long period of overbuilding. That was the excuse from 2007 to 2010. Eight years after home building volume peaked, we still haven’t experienced a rebound in residential construction.

Low household formation, caused, in part, by as millennials living with their parents, and the soft economic recovery, could also be to blame.

One excuse, which may cause an arched eyebrow, is a shortage of labor. More specifically, homebuilders claim they can’t increase production because of their inability to find qualified labor.

This seems like a weak excuse. Continues here

Category: Real Estate, Wages & Income

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

7 Responses to “Home Builders Cant Find Workers? Try a Pay Raise!”

  1. rd says:

    I’ve never seen a developer turn down a decent order down for any reason yet.

    I think we have two new media reasons for any bad reports now: “weather”, including “polar vortex”; and “skilled labor shortage.”

    Soon we will have “material shortages” as well – I think they showed up in 2008.

    • Iamthe50percent says:

      The skilled labor shortage is just an excuse to open immigration up wide for cheap labor. Like Microsoft claiming they need unlimited H1-B’s and now cutting 18,000 jobs.

  2. LeftCoastIndependent says:

    I’m doing another foreclosure rehab project right now and I have to tell you, finding qualified workers to do the job is harder than ever before. And bid prices for sub work are astronomical, not to mention material prices are way up. Profit margins have become extremely tight so I’m thinking this might be the last one.

    • PrahaPartizan says:

      @LeftCoastIndependent, perhaps you and the rest of the industry are going to have to adjust their expectations for what is a reasonable profit margin. The days of hiring cheap labor disappeared when the crazies took over in Washington. Continuing the business just might have become more important than getting rich in the business.

    • save_the_rustbelt says:

      Check the outdoor and hardware sections at Wal-Mart, that is where my unemployed friends found jobs.

  3. bigsteve says:

    I live around skilled construction workers. Many of them simply retired when their jobs dried up. Younger workers have since moved on to other lines of work. It will take significantly higher wages to get them back now.
    This reminds me of my company a power and water utility laying off skill line men during the downturn of the early to mid seventies. When the economy returned those men were long since working somewhere else. They had to train people up from the bottom which takes years. It set them back for a decade. They never have laid off people since. Not even when the demand for electricity decline caused by the bust in real estate of the mid two thousands. The labour participation rate is going to decline for at least a decade more because of boomer retirement. This boomer is going to be next year part of that trend. And my employer is not pushing me out as skill workers are getting hard to find. But my shop has been over staff for five years to train younger people to replace the half of the shop that has retired and will retire over the next 3 years. I do not have any sympathy for companies who did not see this coming and planned for it.

  4. save_the_rustbelt says:

    I am going to instruct all of my grandchildren to avoid construction and manufacturing at all costs (I grew up with both in the family). Why?

    1. first hurt during a recession
    2. last to go back to work
    3. guaranteed osteoarthritis by age 55, probably significant hearing loss as well
    4. even with good safety practices you are likely to get hurt (my knee surgery is in two weeks, been putting it off since construction accident in 70s)
    5. the rich white guys who own and control the country do not care if you live or die, and would prefer to replace you with a Mexican carpenter or a Chinese manufacturing worker
    6. 50% of your bosses will be great people, 50% will be hotheads and psychos

    I hope they listen.

Leave a Reply

You must be logged in to post a comment.