Jobs, Jobs And More Jobs - But Who Will Fill Them?

Well, Bloomberg had a nice article this week on how greater enforcement of immigration laws is having an impact on housing prices. Surprise! Yes, the prices are going up as the price of labor is going up significantly and tariffs on lumber are not helping either. Good news if you are a legal resident of the U.S. doing construction work as wages are going up, but bad news if you are a construction company or someone wanting to buy a house. Difficult balance, but as I wrote in December shortly after his election, President Trump's policies will increase minimum wages whether he intends to or not.

Yes, it turns out folks from across to border are heavily involved in the construction industry - not to mention numerous other areas of hard labor.  Requiring them to come in legally makes sense, but raising the bar with the RASIE Act to their entry, does not make sense in my book. Certainly not with the already low unemployment numbers. Perhaps we can lure some Millennials back into the job market with higher pay, but I do not see that as being something that will happen to any significant degree. Last I checked there are a lot of hard labor industries actively looking for qualified workers and coming up short.

Any way you look at it, new home prices are high and perhaps going higher while sales are suffering. Not good if your overall goal is to boost the economy. Not good if you are looking to buy a home or sell a home. Home sales generate not just profits for the builder and jobs for the construction workers, but folks that buy a new house look to furnish it and buy all the stuff (a/k/a the junk in my house) that helps support numerous industries. What is good for home sales is good for the country and right now the sales are not looking so good, both with new homes and existing homes.

I also heard a report on the radio this morning that labor, once you include benefits and the like, for auto manufacturing is well below 10% of the cost in Mexico of what it is in the U.S. Fortunately, most of the cost of cars is not in the labor but manufacturers are not idiots. If politics force them to build in the U.S., they will simply automate more. The U.S. needs to focus on jobs of the future, not jobs of the past. Then again, there seem to be a lot of jobs going unfilled in construction and similar hard labor areas. Given the participation rate in the U.S. is at the lowest levels seen in decades, perhaps the focus should be on why. Instead of going to college perhaps more schools should focus kids on different career opportunities, like plumbing, framing, electrical, roofing or the like. Just sayin'.

Disclosure: None.

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