Wednesday, May 10, 2017

The "Shortage" of Construction Workers

Interesting post (not entirely in a good way) by Scott Sumner on how there can be a shortage of construction workers. He starts from this news story:
As the Dallas Morning News notes, between 2012 and 2016, wages for Texas construction workers rose 21.2 percent, compared with 12 percent for all construction jobs in the U.S., and 2.2 percent for all jobs in the state. In Collin County, home to Plano and McKinney, construction workers make $98,000. And that was before the new administration began its immigration crackdown. The Dallas-Plano-Irving metropolitan area is short about 18,000 construction workers--about 20 percent of the total. Which means that many homebuilders literally can't find people to do the job, and the rest must attempt to pass on higher costs to their customers.
That $98,000 number is misleading; maybe highly skilled workers at the height of a boom make that, but the average for construction workers is a lot less. The shortage of workers in booming counties is an interesting fact, but it is not hard to explain. First, construction is the most business-cycle dependent part of the economy, and people are reluctant to take up a career than means a big chance of being laid off in every recession. Second, construction shifts around the country more than other kinds of work, and therefore regularly suffers from local worker shortages. Third, the work is often miserable. Which brings me to this:
A poll from the National Association of Home Builders (NAHB) of young Americans ages 18-to-25 shows that almost no millennials want a career in construction -- a high-paying industry. 64 percent of these millennials said they wouldn't even consider working in construction if you paid them $100,000 or more.

74 percent of young adults know what career field they want to pursue, and of these millennials, just 3 percent want a career in construction trades. What's more stunning is that of the 26 percent who don't know what career they want, 63 percent of these undecided millennials said there was "no or little chance regardless of pay" that they would work in construction trades.
First, the NAHB probably financed this poll to fight limits on immigration, so the motives of the pollsters are suspect. Even so, what difference does it make if 64 percent of millennials wouldn't consider working in construction? Only about 5% of Americans work in construction, even using a broad definition that includes secretaries, salesmen and managers. Which means there really isn't much of a mismatch between the 3% of Americans who want to work in construction and the 4% or so who do; the industry only needs to recruit about 4% of the ones who don't know what they want to do. Which seems feasible to me, but would be a lot more feasible if they offered anything like job stability.

But I still think there might be something to what Sumner says:
Millennials were more likely to grow up with indoor activities, such as computers games, and less likely to roam around outside. Perhaps that makes them softer. Before everyone jumps all over me, I strongly believe that my (boomer) generation was softer than my dad's ("Greatest") generation, which fought in WWII. And that my dad was softer than his grandparents, who were pioneers in the Midwest. That's progress!
This is certainly true of my sons, who despite being active, athletic sorts into soccer and martial arts would never consider construction work. (I've asked.) I have pondered why this is. Yes, I think they are "soft" in the sense that outdoor work in all kinds of weather has no appeal to them. Another thing I come  up with is that they are suspicious of the kind of people they would work with; to them "construction workers" summons up either Mexicans who speak no English or Trump-supporting guys with big trucks and Git R Done hats, and they don't want to hang out with either. Mostly we imagine ourselves doing the kinds of work that people we know are doing, and they don't know anyone working in construction, so it is outside of their world. It would be as strange to them as becoming farmers or fishermen. I think these effects may be broadly distributed through our society in lots of ways.

1 comment:

G. Verloren said...

I wonder if there might be ways to make the construction industry more stable.

Part of the problem, it seems to me, is that everyone and their dog seems to have a small construction company, and everybody works as contractors for everybody else. I would think there's just a lot of competition and chaos inherent to that sort of business model, and it's the local workers who lose out by getting laid off whenever the small business they work for can't land any jobs in the local area.

So would it be feasible to shift the industry towards having fewer but larger companies, which operate regionally instead of locally, and adopt an expectation that construction workers will move about the country more, following the jobs?

Let's say you have a half dozen construction workers working for a local company in their small home town that doesn't have much in the way of jobs to offer them. As it currently stands, unless their small company works out a deal with some other company elsewhere for a bit of ad hoc contracting, those half dozen workers have nothing to do, and no job stability.

But suppose instead that those same half dozen workers belonged to a larger organization that served the greater region. They aren't merely potential "subcontracters", but actual full time employees, and they're simply moved to wherever the work is and are taken care of by the company, put up in company housing locally, transported in company vehicles, et cetera.

This would reduce a lot of the job insecurity for the workers themselves, and it would prevent a lot self-competition for the industry as a whole. Instead of having a half dozen unemployed workers sitting around in one place and necessitating hiring OTHER workers to replace them elsewhere, you could just move the existing workers where they are needed.

And while it must be admitted that an itinerant career isn't ideal for many people who would rather work jobs that don't require them to be away from home for extended periods, surely it's still preferable to a career which offers no job security? I think you'd get enough people interested in steady work that moving around to follow the jobs wouldn't be too big of an obstacle for them.