High Demand, Short Supply
October 11, 2016
That’s good for trade workers!
Chapter one of almost every basic course in economics starts with the law of supply and demand. When there is too much supply of a product or service, prices drop and providers of those goods and services leave the business until an equilibrium point is reached and the supply matches demand.
At least that’s the theory. In the real world perfect equilibrium hardly ever exists. There almost always is an imbalance between supply and demand. Sometimes cutbacks in production for whatever reason puts supply below demand. When that happens, suppliers typically cut prices to attract more business, or in the case of labor, raise wages to attract more workers.
This is what is happening right now in the construction and remodeling world. Following the housing collapse that began in 2008, millions of construction workers lost their jobs and an estimated 2 million of them never came back to that industry. They retired, found jobs in other fields and, in the case of immigrants who came here to work when the construction industry was booming, moved back to their native countries. Alas, there have not been nearly enough new trade workers to take their place.
The construction market is now recovering somewhat, and home remodeling is booming. A recent study found that Americans are spending more than ever before to fix up and renovate their homes — largely because banking reforms have made mortgages harder to obtain, so rather than move into new homes people are making what they have more comfortable.
Remodeling and repair contractors would have even more business if they could find enough trade workers to keep up with demand. But supply is woefully short, and wages are rising as a result.
It’s a great time to explore the trades as your career option.