July 25, 2014
The Washington Post told us that homebuilders are having a hard time attracting workers, which is keeping construction of new homes down.
“Labor is scarce. As the housing crisis dragged on, the workers that builders relied on found jobs in other industries, including the energy sector. It’s been tough luring those workers back, Crowe [David Crowe, chief economist for the National Association of Homebuilders] said. Meanwhile, the workers that hung in there are aging, and the industry is having trouble attracting a younger generation.”
When labor is scarce we expect employers to be trying to get workers by raising wages to pull workers away from competitors. This should mean that wages are rising. In fact, real wages in the construction industry have been stagnant for the last three years and are still down by around 3 percent from the peaks hit five years ago.
If no one teaches employers how to raise wages then we are likely to have serious imbalances in the economy for some time into the future.
Note: This was corrected from an earlier version which put the peak as before the recession.
Comments