Is it a wage shortage or a labor shortage? Immigration impacts NC Construction \ stacker news ~econ

pull down to refresh

Is it a wage shortage or a labor shortage? Immigration impacts NC Construction www.wfae.org/race-equity/2025-03-10/charlottes-construction-industry-faces-uncertain-future-amid-immigration-crackdown

349 sats \ 8 comments \ @BlokchainB 22 Mar econ

TL:DR

On a frigid morning in Myers Park, Carlos works diligently to renovate a patio and install a new jacuzzi.

Carlos moved from Venezuela three years ago with temporary protected status (TPS), which allows him to work, but he’s unsure what’s next. President Trump recently revoked TPS status for Venezuelans.

“Well, one tries to get to the workplace that one does every day, hoping to get through the day and, well, come back home with God's will and not be stopped by ICE,” Carlos said.

Carlos left his wife, kids and extended family in Venezuela to provide a better life for them.

“I have a nephew with special needs, and a large part of why I came to the United States is because of him,” Carlos said. “Here I am, trying to give a better quality of life to everyone around me.”

His co-worker Olexi, who is also working with him, is a Venezuelan immigrant on humanitarian parole.

“One cannot escape hearing the rumors in the street,” Olexi said. “The situations in different parts of the country are a strong blow because the construction industry is mostly moved by the hand of immigrants.”

Trump’s promise of mass deportations is stirring fear in the construction industry. Around 30% of construction workers in the U.S. are immigrants. Here, in North Carolina, it’s about a quarter.

[….]

In 2021, construction accounted for more than $28 billion of North Carolina’s gross domestic product (GDP), with the average pay for a North Carolina construction worker at $22 an hour.

Construction worker Olexi says a legal pathway for immigrants that requires them to pay taxes can benefit the U.S.

My thoughts 💭

I often read articles and think does the construction industry have a labor shortage or a wage shortage? How many of these migrants are actually skilled labor? Are these guys in this story welder? Pipe fitters? Brick layers? Crane operators? Or they just guys on a the site? I story paints the bleeding heart perspective of poor guy wants to make a little bit of money to care for his loved ones in a poor country where the economy is completely destroyed meanwhile they mention that construction workers make $22 an hour. Maybe back in 1995 this was a good wage thus you would have able bodied American men (and a few women) applying and getting jobs in construction. At $22 an hour you can expect the worker to gross about $46k. After taxes housing food what is the person left with? Maybe $10k of disposable income?. Paying the labor more could be very difficult especially with construction having very thin profit margins but I often think with better wages the labor shortage could be resolved.

view all related items

169 sats \ 0 replies \ @Undisciplined 22 Mar

Labor's a really interesting input, because the quality can actually improve just by spending more on it. It's usually not at a 1:1 rate, but better paid people often do better work, just because they're being compensated better.

Then there's the added benefit of actually attracting more talented workers at those higher wages.

I thought about this a lot when I had a job in retail. We were paid slightly over minimum wage and I did approximately 4x the average amount of work, pretty much just because not working was way more boring than working. I was pretty sure that if they were paying double they could have attracted more people as productive as me and gotten just as much done with fewer workers for less money.

162 sats \ 2 replies \ @Rothbardian_fanatic 22 Mar

The problem may just be the wages when they are so low in the construction industry. It is sometimes backbreaking labor and much harder than the $20/hr job at the convenience store or local McDonalds. This is probably the reason they have to go with illegals rather than local citizens. If they paid more they may get citizens but make less money. The product will sell for the same because the product is what people are buying not the inputs for the products. The use of illegals is mostly for reasons of the marginal profits for the company.

20 sats \ 1 reply \ @BlokchainB OP 22 Mar

Bingo!!

118 sats \ 0 replies \ @Rothbardian_fanatic 22 Mar

Yeah, i know and I think it is sad. Trying to raise the price is a no win situation because then the company cannot sell its goods or services and goes out of business.

61 sats \ 3 replies \ @SimpleStacker 22 Mar

The analysis of immigrant labor is not much different than the analysis of any international trade.

It's well known that in any market where international producers can make the same product at lower marginal cost, it makes sense to import the product from international producers. This hurts domestic producers because they have to compete with lower price international producers. But it benefits domestic consumers because they get lower prices. Overall, it increases economic output because the final product is being made at lower cost.

In the construction labor market, the producers are the workers and the consumers are the developers. International producers are the immigrant workers who are able/willing to work at lower prices, while domestic producers are the native born workers.

30 sats \ 2 replies \ @BlokchainB OP 22 Mar

This sounds like a textbook economics class answer and ignores the reality of the real world? This type of answer never explains why is labor and production cheaper in said country over another? Besides having mineral and energy advantages I often think develop nations exploit poorer ones to maintain this labor wage imbalance which is a feeding ground for socialism and communism

30 sats \ 0 replies \ @Rothbardian_fanatic 22 Mar

Could it be that the organizing principles of the societies that are very poor tend to make most people very poor while only a few get fabulously wealthy? When a society degrades property rights to nothing then only people with wealth can protect themselves from the ravening state (probably because they are cronies of the state). When there is no protection for property rights of the people, everyone has no human rights and will remain poor and oppressed.

190 sats \ 0 replies \ @SimpleStacker 22 Mar

I agree, the textbook answer ignores a lot of issues.

It does explain why working class natives are more likely to oppose immigration while business leaders are more likely to support it.

Another thing that happens a lot is that economics students only learn this part: trade increases economic output without remembering the part where trade creates winners and losers.

And lastly, you're right... the textbook theory doesn't address at all the actions that developed nations can take to keep developing nations poor, and it doesn't address at all the cultural frictions that come from mass migration.