Now that the housing market in the U.S. is beginning to recover from the crisis which began nearly six long years ago, people are finally becoming interested in building and buying new homes again. The only trouble is, there seems to be no one to build them.
That’s right, a carpenter shortage has reared its ugly head in the United States, with construction companies reporting piles on unused material due to a lack of qualified workers to assemble them.
The fact that there should be a labor shortage of any kind in a country where unemployment rates have been uncommonly high for years is surprising to say the least, so it is only natural to wonder about the cause of such an anomaly. Shouldn’t market forces drive up carpenters’ wages and attract new workers into the field to fill the vacuum?
In an unregulated market, this would indeed happen quickly, as it will eventually happen in the U.S., but government regulations play a major role in hampering such adjustments from taking place rapidly and efficiently.
While regulations on carpentry vary heavily from state to state, it will be instructive to examine the kind of ordeal a would-be worker has to undergo to obtain permission to practice his profession in that bastion of liberal compassion and high-minded idealism, California.
To begin with, even applying for a license requires four years of experiences as an apprentice, journeyman, etc. That in and of itself is no small barrier to entry, as it means that from the time the shortage is observed, it will be four years at the very least before new people will be available to fill it.
The next step is to take two written exams (three if the applicant wants to do cabinet work and finishing), costing $250 to take and $150 to get obtain the license afterwards, a total of $400. That doesn’t sound too onerous, but the fees do not stop there. There is a working capital requirement of $2,500, a contractor’s license bond costing $12,500 and an additional bond costing $7,500. A criminal background check is also required, and if the carpenter wishes to hire any employees, he must also purchase workers comp insurance. In short, if a Californian wanted to take up carpentry as a response to the shortage, it would cost him at least four years and $22,900.
Additionally, if he wishes to do work in any other state besides the one in which he is licensed, he must satisfy that state’s requirements as well, greatly reducing opportunities for mobility and flexibility in his work.
Is it any wonder that there is an inefficient allocation of labor when governments make it so difficult to enter or change professions? These regulations are ostensibly put in place for the benefit of consumers, but consumers are not helped by a lack of workers legally permitted to perfor the services they require, not to mention the elevated prices that come with such restrictions on competition. The persistence of such policies demonstrates clearly the lack of interest politicians have in seeing actual economic improvement, and a better quality of life for the citizens they are supposed to represent.