Here’s a Revolutionary Suggestion For Fighting a Labor Shortage

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Daniel Gross has some advice for the free-market titans in the homebuilding industry who are facing a shortage of willing American workers:

What’s mystifying here is the fact that capitalist homebuilders and their cheerleaders at the Journal are, well, mystified over why Americans don’t seem to want to work construction. There’s a simple reason why Americans aren’t filling construction jobs—and the construction industry appears to be missing it.

Free-market types will tell you that there’s no such thing as a shortage of a commodity—of energy, of food, and, theoretically, of labor. Rather, there is only a shortage of the proper incentives, people willing to pay the appropriate prices or to send the signals that a commercial endeavor is worth undertaking….And yet the market sharpies collectively are throwing up their hands over the construction labor shortage instead of homing in on the obvious solution: Pay people more—a lot more if need be.

Let’s roll the tape. Has the construction industry tried this novel approach?

Starting in 2014, construction wages did indeed go up after falling for four years. But by the end of 2016, having barely made up the earlier decline, homebuilders gave up on this exercise in experimental economics. Wages have dropped 2 percent since October even though the construction industry is apparently still facing a labor shortage. They’re now paying wages lower than they did in 2010.

Paying more isn’t always an option. In the agriculture industry, for example, there’s a point at which paying higher wages to field workers makes your produce uncompetitive. It can’t compete with lower-priced fruits and vegetables from Chile and Mexico. It’s not clear where that point is, but it’s somewhere.

But homebuilding is a nontradeable sector. You don’t have to worry about foreign competition. At some point, it’s true, your costs might go up so much that your homes are too expensive and people won’t buy them, but that’s a long way off. A few dollars-per-hour in labor costs doesn’t add enough to the price of a house to make a noticeable difference. Besides, if there’s a shortage of labor, then there’s a shortage of new houses, and you can price your houses higher.

So don’t give up, homebuilders! Your experiment would have worked if only you’d kept at it. Start paying your workers $28 or $29 per hour and they’ll come flocking.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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