It was weakness in the nation’s housing market that dragged the U.S. economy into its worst recession in recent memory in late two thousand and seven. Hundreds of thousands of construction workers lost their jobs. How times have changed. Orders for new homes were up twenty one percent during the first eight months of twenty fifteen compared to the same period a year ago.
As reported by the Wall Street Journal, the result has been a growing shortage of skilled construction workers, driving up wages and slowing down production. Analysts and builders fret that human capital shortfalls will make it difficult for many builders to complete homes that buyers ordered during the robust spring selling season by the end of the year. Builders typically record much of their profit during the fourth quarter when they complete construction of most of their homes and accept final payment.
One possible solution is to pay workers more. The National Association of Home Builders notes that residential construction workers were paid fourteen percent more on average that the U.S. mean wage in nineteen ninety. By last year, that premium had shrunk to four percent, apparently not enough for workers to forego more stable, less dangerous jobs in other sectors.
