New research by the Federal Reserve shows that the reason
that the US construction labor market has been experiencing a worker shortage
can be linked to the recent housing bubble and the recession. What makes this
situation unusual is that this shortage is happening during a time with a
fairly strong demand for labor and fairly high building activity. Dr. John J.
Paciorek ran tests ruling out the ideas that a large number of workers are
unemployed or have left the labor force being the cause. Paciorek notes that
although the number of workers in the labor force is down from 2006,
unemployment and departures from the labor force have returned to their normal historical
rates. Paciorek attributes the shortage to a lack of new workers entering the
labor force. The majority of these people not looking for construction jobs
appear to be young people who have been scared away from the market by the
housing bubble bursting in 2008.
http://finance.yahoo.com/news/an-economic-riddle--where-are-all-the-construction-workers-180950181.html
Interesting that the construction labor market has been experiencing a shortage. I worked in a similar labor market for the past few years and expected to hear the opposite result. Most of the workers I observed around me were young.
ReplyDeleteIt's an interesting point that even though construction market is experiencing an shortage of labor, at the same time, the unemployment rate is still not low. As the article mentioned, that might because of many young people are unwilling to do this kind of work. But at the same time, what makes me feel confused is that because of the housing bubble, there should be less demand for construction labor.
ReplyDeleteI disagree, I don't think that because of the housing bubble the demand for new houses would be completely diminished. It seems to me that with our strengthening economy people are willing to reinvest in houses. But I know I would be scared to get into an industry which has proven so unpredictable.
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