HELP WANTED FOR LESS PAY
In congressional testimony last summer, Federal Reserve Chairman Alan Greenspan cited shortages of construction workers and truck drivers as a sign of impending wage inflation. Since then, the lack has gotten worse. Trucking companies are complaining, while builders in go-go cities such as Houston and Phoenix report a lack of carpenters and electricians. "We have people crying for workers," says Daniel J. Bennet of the Associated Builders & Contractors.
With talk of shortages, pay for hard hats and truckers should be going up, right? Wrong. In fact, real wages (adjusted for inflation) are falling faster than in almost any other industry. In the past year, average pay in construction has dropped 0.6%, while the decline in truckers' pay was twice that. Meanwhile, wages for all private-sector production workers fell by by 0.2%. Over the past five years, the decline in relative wages is even greater (chart).
Falling wages may help create shortages--by making construction and trucking less appealing. These jobs have always involved hazards and irregular hours. Now they've lost their wage advantage as well. "Young people ask: `Why am I going to do all that for little or no extra pay or benefits?"' says John Heffner, executive director of training for Associated General Contractors, an industry group. With trucking "wages dropping like a stone, it has become a last-ditch occupation," says Michael Belzer of Cornell University.
What's driving wages down in these jobs? Intense competition, deregulation, and the decline of collective bargaining--things that are not about to change. Despite the cries of inflation pessimists, these labor shortages are evidence of the strength of the disinflationary forces in the U.S. economy.EDITED BY MICHAEL MANDEL