Why Increased Infrastructure Spending Is Not A Full Answer To America’s Employment Problems

Gary North recently posted an article that shows just how far quality pre-fabricated and computer-printed construction techniques have come in the building industry.  While these methods do not apply to high-end custom single-family homes,  they are already having an impact in the modular home market, as well as the suburban strip and downtown highrise arenas.

As a licensed general contractor, I’ve seen homebuyers in the low- and mid-price ranges (under $200K in my market) already migrate to prefabricated / modular homes over stickbuilt.  Not only is there a significant cost advantage (even including site prep and foundation work), the quality of factory-built homes in this price range is better when they are build indoors, using fixtures and jigs to ensure that everything fits together tight and snug.  For the buyer looking for the best price/quality relationship in basic housing and office space, prefab wins.

The problem America faces is this:  We continue to import more unskilled and semi-skilled labor, adding to the millions of such people already in the country thanks to the immigration policies of the past couple of decades.  We also have a native-born population of millennials, many of whom look down their smug noses at working “in the trades”, preferring a hip job in high-tech, a dummy job in retail, or no job at all.  Neither of these worker cohorts will find increasing opportunity as building construction becomes more automated, more like assembly-line work.  Here’s the article; please watch the short embedded videos.

Chinese Hotel: Six-Day Wonder

Gary North – March 07, 2017

I liked this video.

Now watch this. Pay attention to how few workers are visible in any stage of production.

The construction company announced in 2010 that it would do it in 2016. It did.

There is no way that these techniques will not be adopted all over the world. Nobody is going to give China this kind of competitive edge. These techniques are going to be imitated.

It means the end of today’s technology. Today’s technology is labor-intensive. This will not be true by 2030.

The next step will be the adoption of these techniques for housing developments. The construction industry will work out the bugs in high-level projects. Then these techniques will be adopted by housing developers as the price of the tools continues to drop.

As labor costs fall, which they will, unemployment is going to spread in this industry. The survivors are going to be people who have the ability to use the new tools, but there will be fewer of these people than today. The best and the brightest will keep their careers; everybody else will have to go into a different line of work. But what line of work are they going to go into? If not construction, then what? They have an advantage: the willingness to work in the blazing sun. But that advantage will disappear with the adoption of prefabricated technologies. Businesses will be building houses all year round. Employment in this industry will no longer be seasonal. This will be good for home buyers, but it will not be good for most construction workers.

This is another reason why immigration from Mexico is going to fall. The construction industry has been one of the biggest employers of illegal aliens. This will not be true in 2030.

It’s already here in Russia.

Workers without decent educations will have to move into services. Western civilization has been doing this for two centuries. This is not going to stop.

Workers who refuse to upgrade their abilities either through formal education or apprenticeship are going to find themselves permanently locked into low-productivity, low-wage careers. If they are unwilling to master digital technologies, they’re going to find themselves permanently caught in between government welfare and lower-middle-class careers.

They won’t see this coming. People never do. But this is clearly where we are headed, all over the world.

This will be tremendous for consumers, and it will be tremendous for workers who are willing to master digital technologies. It will not be tremendous for the lower classes who are present-oriented, self-destructive, and unwilling to discipline themselves. This is as it should be. There should be no free rides in society. Consumers will not tolerate it, and governments should not subsidize the free riders.

The estimated population for the United States in 2050 is 400 million people. They will need housing. They are going to get it.

North’s conclusions are not as optimistic as they may sound at first glance.  How many service jobs can the US economy support?  Everything from hamburger flipping to routine doctor exams is already being automated.  The segments of the population eminently equipped for these low-end jobs are growing faster than any other segments.

And for the folks who are smart and ambitious enough to master digital technologies, how many opportunities will they find?  Paraphrasing some Democrat senator’s recent comments (sorry, once in a great while the progressives do get it right), most jobs we’ve lost have not been to immigrants — they’ve been to technology. 

I see a bleak future, almost regardless of America’s immigration policy.  If we cap growth of the low-skill segment of our population, that segment is still growing like wildfire in most of the rest of the world.  And thanks to social media and raving Imams, those people will not just sit back and quietly starve.

source: http://www.garynorth.com/public/16320.cfm

  — SafeSpace —





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6 Responses to Why Increased Infrastructure Spending Is Not A Full Answer To America’s Employment Problems

  1. Hardnox says:

    Good piece. No arguments here.

    Infrastructure rebuilding is still important IMHO given it has been neglected for so long. The systemic problems are shitty politics which is damned near impossible to fix.

    • I.R. Wayright says:

      Speaking of infrastructure, did anybody else look at the photos of the Oroville Dam spillway and ask, “Where is the rebar?”

  2. azjen says:

    I’m not in the construction industry, but I did pick up a few thoughts from my husband who spent over 30 yrs building large buildings (big infrastructure). He was always able to let the supervisor know if their pours were not set up correctly & would therefore blow unless they used the correct construction. Before he retired they were bringing in parts on jobs that had been built elsewhere. Much like they talked about in this article. It does make things go smoother & yet it takes away from the true art of carpentry or masonry. This can apply to large jobs as well as the smaller ones.

  3. Uriel says:

    good grief good piece SafeSpace. Sounds like the Jetsons have arrived. Soooo what happens to humans once machines take over?

  4. azjen says:

    I guess for the old-timers it is time to retire. Many of the young people-men & women today have few problems putting pieces of buildings together. However, those who have worked in the same industry may have a hard time adapting to the “short cuts” & the way that people do things. Sooner or later, their jobs will be completely phased out when the machines take over. They might as well figure that they will have to find a new job; perhaps, in a different line of work. I just hope that they are young enough to adapt to a new kind of job. And they will be hired.