As we’ve talked about on this site several times, economics tells us that if you reduce the amount of anything, the price to acquire it increases. This is true of labor as well, as construction companies in Texas are learning. Turns out when the number of illegal aliens doing construction decreases, the cost to get legal workers goes up. Golly, who could have ever predicted that?
In my humble opinion, this is another example of how the United States is living on borrowed time and artificially low prices for goods and services. How much of what we enjoy every day is either paid for using debt or illegal alien labor, or is the result of people making pennies a day in some 3rd-world dump of a country? Cheap veggies, cheap housing, cheap lawn care, etc. all done on the backs of illegals. Parks and recreation and roads and services and government employee pensions paid for by going into debt. $700 phones and $200 shoes and $1000 TVs and $100 toys made by people who could never dream of owning the products they are making.
Tough choices need to be made. Do we get rid of under-the-table illegal alien labor and pay true cost for our lawns and maid services and tomatoes and clean hotel rooms? Or do we keep that cheap labor so we can spend the money saved on products produced below true cost (if regular labor laws and minimum wages and everything else) on those $200 Nikes and $700 phones? How far into debt can our cities go before they are unable to borrow any more and basic services shut down? Do we continue to exploit poor people around the world for our cheap goods? If we are going to live in an honest economy, where labor and business law are enforced because all employees are legal and don’t have to hide “in the shadows”, then our disposable income is going to go down as increased labor costs are passed on to consumers. Personally, I’d rather pay more for my tomatoes to be picked by citizens paid based on market forces.
Anyway, on to the article from Fox News:
President Trump’s tough stance on immigration may be having an unintended consequence — higher housing costs.
That’s because builders say it’s getting harder and harder for them to find workers, especially in places that rely on immigrant labor.
“There’s just not anybody you can hire out there,” said Stan Marek, CEO of Marek Construction.
Just how bad is it? According to the National Association of Home Builders, more than 56 percent of developers nationwide are reporting labor shortages.
NAHB says the problems started when the recession hit and domestic construction workers dropped out of the market to find other jobs. At the same time, immigrant workers went back to their home countries. But as the economy has picked up and the construction industry has heated up, those workers have remained missing.
The problem is compounded in hot real estate markets where more and more housing projects are finding fewer and fewer workers. In places like North Texas, recently, it’s been a triple whammy.
“Half of the workers in construction in Texas are undocumented,” Marek said. “We do hear that there are a lot of undocumented workers that are leaving the state, going to other states that don’t have the anti-immigrant sentiment and many of them are going back to Mexico.”
Ted Wilson with Residential Strategies, Inc. has run the numbers.
“We’ve seen direct construction costs climb by over 30 percent,” Wilson said, “and a lot of that is directly attributed to what builders are having to pay their subs and trades in wages.”
Meaning, with so few workers out there, construction companies have had to pay more to attract them, which adds to the cost of a home.
Uh, yeah. That’s kind of how economics works.