Don't Drink the Tea. Think With the WE.
Sep
2014
15

The Myth of a Labor Shortage Is Being Propagated by One Big Lobby’s Bunk Little Survey

Skill, Responsibility, High School Statistics Class.

Skill, Responsibility, High School Statistics Class.


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A wave of articles promoting the myth of a “labor shortage” have hit American newsstands of late, and most are using a study from the Associated General Contractors of America (AGC) as their basis. But the study comes with a whopper of a disclaimer, one which has been conveniently ignored by the media sources trumpeting the weak data as certain fact.  False hope for a labor shortage can’t will it into being.

The AGC is typically a source of reliable employment data, but this study can’t rightfully be placed under the same umbrella. Its findings were derived from 509 survey respondents, all of whom subscribe to the AGC’s construction industry brief (a newsletter of sorts).  With nearly 730,000 total construction employers in the United States, the assertions in the report are nothing more than conjecture.

The AGC admits as much in a disclaimer attached to the survey results:

While the results of the survey indicate a shortage of skilled labor in the construction industry and bring to light several implications related to that finding, it is important to know that our sample size is both limited and self-selected. Survey participants were not drawn from the construction industry at large or at random, but rather from those invited to answer the questions, opening up the possibility that survey respondents share more characteristics in common than a random sampling of a similar size.

Despite the AGC’s honorable inclusion of this context, publications as big as the Denver Post and as small as ForConstructionPros.com are screaming the stats from the rooftops. The labor shortage, it appears, is as popular as it is alleged.

If we were truly in the throes of a labor shortage, especially one as crisis-like as what is being described, wages would rise. This is economics (and common sense) 101. The fact that companies can’t find workers to accept low-paying positions does not mean qualified human beings are non-existent.  But rather than admit wages are too low, the buck is passed to an imaginary, blame-deflecting trend.

When all of these outlets cite the study without noting its glaring limitations, they do a disservice to their respective readerships which expect credible information. Take for example this piece from Real Estate Weekly.  The article claims that, “two-thirds of contractors are having a hard time finding qualified workers,” and that, “one-in-four firms have passed on projects because of labor shortages.”  At face value they are powerful statistics.  However, the reality is that two-thirds of ’0.0007% percent of construction employers with similar ideologies’ are having a hard time finding qualified workers, and that ’25 percent of 0.0007% of construction employers’ have turned down work.

Without being taken at random and without having taken more than a fraction of the massive contracting industry into account, there’s only one thing this study can be taken: with a mighty grain of salt.

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