Still No Signs Of A Homebuilder Labor Shortage In North Texas

DALLAS, TX - FEBRUARY 06: A construction site is viewed in downtown Dallas on February 6, 2015 in Dallas, Texas. As crude oil prices have fallen nearly 60 percent globally, many American communities that became dependent on oil revenue are preparing for hard times. Texas, which benefited from hydraulic fracturing …
(Photo by Spencer Platt/Getty Images)

Despite that claims of Dallas homebuilders that they cannot find enough workers to meet demand for housing, recently released government data indicates there is no labor shortage in the area.

“Ask a homebuilder to name the industry’s biggest concerns, and the lack of labor is near the top of their list,” Dallas News real estate editor Steve Brown wrote in a story titled “No End In Sight For North Texas’ Labor Shortage.”

The story goes on to quote Phil Crone, the head of the Dallas Builders Association, who claims that as many as 20,000 workers are needed in the area. “In our estimation, it is 18,000 to 20,000” Crone said.

If the building trade in North Texas was facing a labor shortage, wages would be rising rapidly as builders competed for workers.  Indeed, the Dallas News story indicates that something like that is happening: “Finding labor has become a full-time job for some subcontractors, who must be on their toes to keep competitors from stealing their workers.”

But according to the most recent data available from the Bureau of Labor Statistics, construction workers in Dallas actually earn lower than the national average hourly wage despite the fact that overall wages in Dallas tend to be higher than the national average.

Workers in the Dallas-Fort Worth-Arlington Metropolitan Statistical Area had an average (mean) hourly wage of $24.21 in May 2016, above the nationwide average of $23.86, according to the U.S. Bureau of Labor Statistics. Assistant Commissioner for Regional Operations Stanley W. Suchman noted that, after testing for statistical significance, wages in the local area were higher than their respective national averages in 8 of the 22 major occupational groups, including sales and related; community and social service; and management. Eight groups also had wages that were measurably lower than their respective national averages, including construction and extraction; building and grounds cleaning and maintenance; and personal care and service.

While more recent data on wages by occupational group is not yet available from the BLS, overall wages and salaries in the Dallas metropolitan area have only climbed 2.8 percent. That’s barely more than the nationwide rate of 2.6 percent. If construction wages were spiking in Dallas, it is likely that it would show up in this broader measure of wage inflation.

According to the jobs site Indeed.com, the average construction worker wage in Dallas-Forth Worth is $12.69 per hour. According to Indeed.com’s data, this is 9 percent below the national average.

What’s more, Brown’s report in the Dallas News suggests that the labor shortage in the homebuilding industry goes as far back as a decade, despite nothing other than anecdotal evidence to support this claim.

 

Claims of that a labor shortage is holding back homebuilding are nothing new. Writing in 2014, Nick Timiraos of the Wall Street Journal argued that the math doesn’t prove such a claim to be true. “Anecdotal concerns about a shortage don’t quite add up for many economists, who say if there was truly a shortage of skilled construction workers, then the share of construction workers who say they’re seeking employment and can’t find any would be lower,” he wrote.

Economists at J.P. Morgan expressed skepticism as well, arguing that if the homebuilding industry “were truly having a first-order effect on retarding growth in the housing market, one would naturally expect to see wages for construction workers and prices of construction supplies rapidly accelerating,” they said. “Nothing like this is even remotely occurring in the data.”

Tom Ciccotta is a libertarian who writes about economics and higher education for Breitbart News. You can follow him on Twitter @tciccotta or email him at tciccotta@breitbart.com

.

Please let us know if you're having issues with commenting.