Today, David Brooks made the absurd claim that the construction industry is experiencing a labor shortage because Americans won't take construction jobs:
"Construction is hard, many families demean physical labor and construction is highly cyclical. Hundreds of thousands of people lost construction jobs during the financial crisis and don’t want to come back. They want steadier work even at a lower salary."
I don't buy it. While I suppose there are some jobs that people won't take at any price, Brooks can't seem to work out the basic math of his own column, as he follows up with:
"Adjusting for inflation, wages are roughly where they were, at about $27 an hour on average in a place like Colorado. Instead, employers have had to cut back on output. One builder told Reuters that he could take on 10 percent more projects per year if he could find the crews."
Let's think about this for a second. A builder complains he cannot find crews to work on his projects. Yet real wages have been stagnant since the last construction boom. This does not equate to "he can't find workers at any price." This means that he cannot find workers who will do what he wants without impacting his margins. Our builder is looking at these extra projects he could do and is saying he will only do them if, as owner of the development company, he can realize his preferred rate of return. Since wages are the cost he figures he can most control he's holding firm on what he will pay to get these projects done.
The Brooks argument that the industry can't even seem to recruit out of high school because families "demean physical labor," is especially laughable. The industry is, by Brooks' own description, going into schools to recruit for an industry that has shown no real wage growth in 10 years. None. Maybe families are demeaning not physical labor so much as unrewarding physical labor. Whether or not a person will take a job that involves physical risk or discomfort is obviously a personal decision but I'd think a top question would be whether or not the pay is worth the chance of injury or the sweat. Industry that does not reward productivity with rising wages would not be a pick for most.
Now, the Brooks column is about immigration and what he wants to argue is that immigrants don't take jobs away from born citizens but instead take jobs that born citizens don't want. His secondary point is that there is no fixed pool of opportunities, but rather one that contracts and surges with the economy.
That the breadth of opportunities available is inconstant is empirically correct. That immigrants take the jobs that born citizens refuse seems contradicted by the article. Were it true, our real estate developer would have no trouble hiring crews for the incremental projects he says he wants to complete. No, the problem here is simply that the capital owner has a return expectation that he is unwilling to revise in order to meet the wage expectations of his potential workers. That is not a skills gap. That is not an unwillingness on the part of workers (immigrant or not). It is a pricing difference between two parties in a more complex than it seems transaction.
Ultimately, when it comes to immigration, I am a "the more the merrier," sort. I believe all the arguments about fresh ideas and refreshed demographics and I look forward to new neighbors and the virtuous cycle of work and consumption that can result.
But when it comes to jobs and wages, the real struggle is not between immigrants and the native born, it's between capital owners and those who actually do all the heavty lifting.