Monday, October 23, 2017

Need Skilled Labor, Pay More

This article from the MoneyBox blog is a must read for every industry struggling to find skilled labor.

“Construction is ground zero in the worker shortage,” the Wall Street Journal editorial page chimed in on Thursday. Indeed, according to the Bureau of Labor Statistics, there are 150,000 unfilled construction jobs in the United States. And as the Journal’s editorialists note, “a January survey by the Associated General Contractors of America found that 73 percent of firms had a hard-time finding qualified workers.”


Why? Many people were flushed out of the home construction industry when it collapsed last decade, and went on to find other work. Many of the undocumented immigrants who filled the posts have left the country, or, in some instances, have been deported. The demographic that does this difficult physical work is aging—as the Journal writes, “the average age of construction equipment operators and highway maintenance workers is 46.” And, gee, it seems Americans just don’t want to get their hands calloused and risk injury pouring foundations and erecting frames.

What’s mystifying here is the fact that capitalist homebuilders and their cheerleaders at the Journal are, well, mystified over why Americans don’t seem to want to work construction. There’s a simple reason why Americans aren’t filling construction jobs—and the construction industry appears to be missing it.

Free-market types will tell you that there’s no such thing as a shortage of a commodity—of energy, of food, and, theoretically, of labor. Rather, there is only a shortage of the proper incentives, people willing to pay the appropriate prices or to send the signals that a commercial endeavor is worth undertaking. If you’re only willing to pay $2 for a gallon of gas, there will be a crippling shortage, because some producers won’t be able to afford to provide it. If you’re willing to pay $4 per gallon, the market will magically produce a bounteous surplus.


And yet the market sharpies collectively are throwing up their hands over the construction labor shortage instead of homing in on the obvious solution: Pay people more—a lot more if need be. Wages in the residential building industry are growing at twice the rate of wages in the overall economy.

CLICK HERE to read the entire MoneyBox article. It presents new ways to look at our country’s skilled labor shortage.


Anonymous said...

Coach, what is the average modular home production line worker paid per hour in PA and how much should the factories offer to attract workers from other industries?

If we are successful in filling our ranks, will they be ready to work on the line?

Just paying more money does not automatically fill our labor shortage.

Coach said...

I have a general idea what production line workers are paid and it sounds like you do too.

The article from MoneyBox pointed out that in order to attract new people to construction, a factory would have to pay more than what is normally offered by any type of factory in the surrounding area.

One problem I did not see mentioned in the article was impact higher wages would have, if any, in an area of very low unemployment where top wages are already being offered.

Another problem that is facing every factory, no matter what they produce, is drug and alcohol abuse. In my area Opiods are a big problem and these people you don't want working in a modular home factory.

Paying more may be a short term answer but I don't think anyone wants to get into a wage war.

Anonymous said...

I remember the days in construction when the pay was good. College graduates would opt for a career in construction working with and next to non college graduates. I am almost 60. This cheap new world order destroying America and the middle class needs to go. The factories and construction jobs that paid well created the middle class. I have watched the construction industry be destroyed by unamerican large greedy evil corporations. Like the tract builders. Take your choice on them. Time to take our country back. Cut the taxes so people can afford things and rebuild the middle class. The means you corrupt sell out corporate big wigs that are guilty of treason against the USA need to be dealt with.

Yes you will attract intelligent people if you pay enough. The fascist new world order lie is Americans will not do these jobs. Truth is the risk reward ratio is so horrible why do the work. Bunch of scumbags truthbe told wrecking the country and the American dream for decades.

Anonymous said...

Tried to write this on my tablet and it is user abusive just figure out what I meant lol

Anonymous said...

Higher wages may equate to more industry job seekers but it does not equate to more SKILLED workers. Younger generations have not been taught how to work with their hands, rather taught that college is the path to easy street and big bucks. Due to this mentality there is on average a 20-25 year gap of "passing the baton" on trade skills to younger generations to carry on the skilled trades. It is a uphill battle for the manufacturers to try and teach these younger generations commitment, dedication and work ethic that should have been instilled in them by their parents, while at the same time teaching them a skilled trade. Compound that with manufacturing delivery schedules and profitability and you start to see the magnitude of the issue at hand.

Anonymous said...

Higher wages are needed in order to attract and retain employees. The industry first must attract employees and be willing to train them. After they are trained, must pay employees a wage that is sufficient to retain the employees that are worth keeping. I am a licensed civil engineer that started in the construction industry swinging a hammer and sweating pipes. It wasn’t long before I hit the top end of the pay scale for what my bosses want to pay; even rising to the level of lead man. Decided that in order to support my growing family, would finish schooling and got my license. I really enjoyed working with my hands and seeing something rise up from a pile of sticks and panel, but the pay was not sustainable.