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Immigration Policy & Cabinet Shop prospects
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This morning's edition of the Wall Street Journal has a very lengthy article about the role of Hispanic workers in the construction industry. The drift of the article is that we don't have as many Hispanic workers as we need and this labor shortage is causing delays or cutbacks in many construction projects.
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Depends on how you look at it. If you are a contractor who is greedy or in desperate need of cheap labor then you can never have too many. If you are an employee looking for a WELL PAID position then there are too many. I dont think that construction prices have been able to rise as rapidly as prices in other markets. Maybe a little bit of a squeeze on cheap labor will help cause a rise in the price of woodworking?
I wonder who was responsible for the article, and what their true motive was?
...And if everyone plays nice, why should this thread be deleted? I think there will be some really good incite into this.
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Family Man, Did you read the article?
The Wall Street Journal is not given to a lot of histrionics in their reporting. This is some important information for those of us in the construction industry.
There is a concept in economics called 'Price Elasticity of Demand'. It is basically a way of measuring how responsive demand is to price. A customer, for example, who could maybe justify a remodel at $200K would simply go away if it cost $400K. Since we depend on these kinds of customers topics like this are germane to the Business of Woodworking.
The WSJ has featured a half dozen articles in the last six months lamenting the lack of construction labor and the impact this is having on the economy. Projects that make sense to build are being postponed or shelved altogether.
Anything that we can do towards creating good policy helps raise all of our standard of living. The first step to creating good policy is to deal with facts as they exist on the ground and not necessarily the ones that are cherry picked to support a particular agenda.
In the case of the Hispanics the trends of a few years ago are reversing. More Hispanics are returning to Mexico than coming to America. This results in a net loss of labor hours they used to provide.
The same thing is happening with Chinese demographics. Their manufacturing prowess used to be the number of low-cost bodies they could bring to a factory. As their family size gets smaller and smaller and more urban this marketplace advantage is disappearing.
It used to be that good cherry lumber was easy to come by. The woodlots in the Allegheny mountains used to be owned by a lot of guys who came back from World War II. Today those woodlots are managed by family trusts. The trees are bar coded & GPS devices on them. The family trust knows exactly what they are worth on the spot market and they are worth a lot more as veneer than as logs. They are worth more because the rest of the world doesn't want to just ride bicycles anymore. All of this is connected and all of it affects us.
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My original post was based on this is drastically split between along ideological lines (not left/right but globalist & nationalist). Cabmaker knows my position and I know his.
Jonathen brings up one very important aspect. There are others. I will not state them here. I have found WW to not be friendly to such discussions, as is their right.
But the thought that the "WSJ is not given to a lot of historionics in their reporting" I find almost laughable. As I do in the case of every single MSM source. We've all (including every "journalist" and media source) have biases and agendas- some are just honest enough to admit it. MSM is not.
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Jonathan,
I would guess that everybody's wages would increase if we allowed illegal labor to come out of the shadows. A lot of people work in harsh conditions for low wages merely because they are afraid to put their complaint on the radar of those who would deport them.
Most employers collect taxes from these people. They have to do that in order to declare the associated cost as a business expense. The net impact of this is that a lot of illegal workers contribute to FICA & Social Security but aren't around to collect those benefits later on. This produces a windfall for the rest of of our citizens. In this respect illegal labor has helped to subsidize legal labor.
This next part is pure conjecture: I would guess that you could double or triple the wages that are paid to Hispanic workers and still not attract enough American citizens to replace their contribution. You're not going to get an anglo-saxon citizen to pick lettuce or harvest apples at any price.
There is an entrenched mindset at play here. Outside of the construction industry the workweek is a 24/7 concept. Hospitals, Policemen, Firefighters, Ferry Workers, Grocery Clerks, Baristas& airplane mechanic all work any day of the week any hour of the day. Try getting a carpenter to work anything other than 8-5 Monday thru Friday. Just like Banker's hours, these people have drawn a line in the sand that has nothing to do with wage rates. It's expectations and concepts of entitlement that keep these jobs from being filled by anyone other than an immigrant.
The above argument is predicated completely on logic and makes no reference to any WSJ or MSN article. If anybody would care to speak to these specific points I would love to be edified.
(In the interests of full disclosure, my father was an immigrant. His mother carried him across the Canadian border from Alberta in 1913. They didn't check in at Ellis Island or anywhere else. My grandmother never did receive citizenship papers. She had 5 sons simultaneously serving in the armed forces during World War Two.)
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Cabinetmaker, I see your point about wages increasing if the immigrant labor force were allowed to step out of the shadows. You are also correct about the fact that there are many low wage positions that would not otherwise be filled by anglo citizens.
Particularly in construction and agriculture these low wage positions are heavily exploited in order to fatten the bottom line. I have found that many times contractors would much rather hire 3 illegals who work for 12-15 bucks an hour, and ditch them when the project is complete, than to hire someone legally and have to keep them on staff.
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Jonathan,
There is a whole other culture that is dependent on illegal aliens as much as contractors and farmers (and therefore the rest of us) are. Interdiction itself is a free-standing industry. There are a lot of resources committing to defining the bogeyman and defending us from him.
To quote Lou Reed, just like AIDS needs a vaccine, somewhere out there a vaccine that needs AIDS. Fear mongering is not just a cottage industry, it's a growth industry. Talk Radio makes a lot of profit from fear. All media does. The financial underpinning of TV is predicated on advertising specifically designed to make you feel bad about yourself or scared of something else.
When you think about it, my customer's are exactly like that nefarious contractor who would ditch his crew when the project is complete. I can't think of a single customer that didn't ditch me when it was done.
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So in the end it is all driven by consumer greed? So this is not a matter of an illegal people group and their migration. But a matter of what the consumer wants and what they are willing to pay. If we made all illegas legal and raised their wages the same employers would find another work around or way to lower the expense of those they employ in order to maintain the desired profit margin.
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It is about supply and demand.
To the contractors and homeowners they buy at the lowest price.
But the immigrants are subsidized by the state in Calif. 1/3 of welfare in the US goes to Calif with 1/8 of the population.
That gives them a pricing advantage over the locals.
Breakdown by state
State of residence Estimated population
in January Percent of total
All states 11,555,000 100
California 2,930,000 25
Texas 1,640,000 14
Florida 980,000 8
OTOH they are more willing to work.
In any event I predict the wages in the construction industry are going to be going up big time.
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Pat,
Those of us in urban centers feel the same way about our rural neighbors. Some non-populous counties in Eastern Washington receive $46K per student in education subsidies. This compares with $10K per year in our most populated county.
This is still a good investment. They don't have the tax base to support better schools but it is important for all of us that everybody gets an education. If you think the problem of welfare is a bad one, imagine what it would be like with no welfare.
Imagine what employment would be like in some sectors of our country without the pork barrel investments that politicians bring home. There is a reason you have a bridge to nowhere in lots of places in our country.
Your statistic regarding percentage of Hispanic population vs percentage of welfare benefits needs to be adjusted to reflect that the majority of their contribution to FICA and Social Security is going unclaimed. Factor in too that the wages these people collect goes back home. Since Mexico imports a lot of their product from the United States that money comes back to create jobs locally. The farmers in Apple Country owe their existence to these illegal immigrants.
The point I am making is none of these issues are so simple or succinct they can fit on a bumper sticker.
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My only point is that they have an advantage on wages because of subsidies.
The rest is conjecture.
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You are right Pat.
The guy who actually gets the subsidy is the guy who pays less for his house. Isn't that ironic? If you connect the dots far enough you will see that the homeowner is also a welfare queen, not just the shareholder for the company that built that bridge to nowhere.
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Yup, cept the scale gets tipped further and further away from the small business.
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Bottom line is that the middle class was not just devastated by offshoring. I am old and can remember when framing, drywall, masonry and every other construction job was a good paying middle class job. They were done by Americans and there was nothing shameful in doing hard labor. Millions of those middle class jobs are done by illegals and I see it on every jobsite we visit. I am not sure those will ever come back to American citizens.
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As the middle class is pillaged and bled for every last cent until it is essentially gone, or a made into a transition state from top to bottom or bottom to top, so it will be (is) for the small business - the backbone of the middle class.
Businesses will be bled for every penny, every service that can can be tagged onto their collective backs. There will be little real growth, except for the growth that can happen before it is taxed or legislated or somehow burdened.
The largest transfer of wealth in the known universe occurred just a few years ago, directly under our noses, and we all have done nothing to prevent that model from becoming the norm that it now is.
Soon to be a major movie.....
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Glen,
There used to be a time in this country when the Irish were the "illegals". You could get domestic help for what we pay Hispanics today.
Like you, I remember when the jobsites were filled with people who looked like me. This was also back in the day when the contractor would pull up to a jobsite in a pickup truck with a hard shell samsonite briefcase in the back with his chop saw (that was made by Makita). He needed the tough briefcase because there wasn't enough room for it in the front with his dog and thermos of coffee.
The trades were different back then. A carpenter could and would pour the concrete foundation himself as well as frame, roof and hang cabinets.
Prior to our day the carpenters built the cabinets onsite. Specialization is what drove the costs down. The first time a plasterer met a mud guy with a bazooka the plasterer was a dead guy. The advantage the bazooka conferred was short lived and now that plasterer had to go to work for someone who could afford the technology.
Life changes. You can buy a shirt made in China (Vietnam?) for $8.00 and you don't even have to drive to the store anymore. Nobody except the tailor laments the fact that people don't wear handmade clothing any more.
David, they already made that movie. It's called 'The Big Short'.
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Sorry to interrupt the beautiful sadness of it all.
I won't put up any charts as you don't believe them and they appear to anger you all.
The US has record low unemployment. A big part of the reason there are fewer middle class is that they have moved into the upper class.
Technology is a big part of the reason for that.
The Latinos have taken over the trades as they are about to be the majority. Which is fine by me, I like Latinos.
I just object to the subsidies.
What is not mentioned is that the cheap goods made available from off shoring has raised the standard of living, i.e. you can buy more stuff with the same dollar.
If you actually start Looking, you see through the straw man BS and see that the crash in 2008 was going to happen no matter what because of demographics but was made much worse by someone who wasn't even mentioned in the Big Short, Alan Greenspan.
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The crash in 2008 happened because my neighbor's illegal employee was making $12.50 an hour sweeping the floor and bought a $200000 home with stated income. His hispanic broker told him to say he made $60000 a year. Greenspan was an idiot but stated income and derivatives along with suppressed interest rate might have had a part in it.
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Yup and what preceded your neighbor's story was the bubble mentality to do this sort of thing created by Greenspan's lowering of the interest rate in 2002.
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I don't really care where the help comes from, but as a whole there is a robust non tax paying labor force, that is further subsidied by greedy business owners. Most of the subs on the job site get paid by check as a business owner. They immediately run to the boss's bank, cash the check and pay their workers in cash. No payroll deductions. If you go directly to the bank branch there is no record or paper trail. These "business owners", in addition to no license, have no bank account and operate in cash. Neither their profit, nor their employee's wages are taxed, and they freely admit it. The boss never sends out 1099's. These people are not working for starvation wages, most are making in the area of $20/25 an hour.
I go away feeling the fool for keeping a set of books and paying social security, Medicare, and income taxes.
Now, our poor underpaid emigrant workers go to the welfare office and reap a big hunk of my taxes in the form of welfare, because they are trying to support a family on the $15k they list on their taxes.
Now I ask, how does a guy with "$15k" a year job roll up in a $45k pick up?
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Sea444,
I am going to go out on a limb here and suggest that probably more than at least one of the members of this forum has been offered and has accepted payment in cash for goods and services.
I would speculate also that at least some of this scofflaws have not only saved themselves a trip to the cash machine but also to their accountant.
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There is NO opportunity for cash in the commercial world, you are lucky if you get paid at all. The contractor would not pay in cash otherwise he will paying the taxes for his workers on a commercial job.
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I have not had a cash commercial offer in years, would not do it if i did
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