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Labor Shortage From Border Policies Could Impact $1 Trillion Infrastructure Spending Program

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By now, the entire world is familiar with President Trump’s stance on border security and his infamous wall. Yet, as Trump pushes to remove illegal immigrants from the U.S. citing safety and security concerns, there’s some already noticeable results that he hadn’t planned on… As a result of Trump’s stance on illegals, more and more builders are finding themselves with a shortage of reliable labor to put up homes. As a result of the labor shortage, home prices are rising quickly

The Consequences of Labor Shortage

Whether from President Obama’s past policies or President Trump’s current policies, unemployment is currently at the lowest level it’s seen in about a decade at 4.4 percent. That means more money coming in from payroll taxes for the government and also shows signs of a healthy industry. However, one industry that isn’t rising is builders. With the exception of major cities with ongoing development projects such as New York, Chicago, LA, and Miami, contractors are seeing shortages of skilled labor positions. As a result, construction labor costs are rising an average of 4-5 percent annually, which is more than the annual rise of inflation.

Some reasons are that during the last construction downturn, many workers found other careers or simply retired, while younger people today stay away from labor positions. However, the biggest culprit looks to be President Trump’s immigration policies. More than 25% of all construction workers are immigrants, with about 20% of workers being illegal immigrants.

Watch the video from ABC News as Trump ask Congress for $1-trillion infrastructure investment:

Many of these workers rely on H-2B visas, which are temporary visas issued to workers with non-agricultural jobs. These Visas are capped at 66,000 every fiscal year, though return workers don’t count towards that number. The homeland security secretary can increase the number of visas to about 130,000. But even with that number, concerns point to the construction industry needing about another 500,000 workers to fill all open positions. Employers must advertise to American workers before hiring foreign labor under H-2B rules. And with the time it takes between applying for and receiving visas, foreign labor may not be available for weeks or even months. That delay would affect seasonal help as well as infrastructure spending, leading to higher prices remaining for businesses who rely on foreign workers. Don’t expect those prices to go down anytime soon.

Get financial adviser, Guy Cohen’s strategy on trading market’s response right here.

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13 Comments

13 Comments

  1. Pingback: Guy Cohen Walks you Through Where the Smart Money is in Trading Tech

  • Avatar geneww1938 says:

    I believe this is a temporary hiccup that will not truly affect our economy. As wages rise, (yes home prices will increase) some of the unemployed may come off welfare and return to work, tax revenue will increase, and social services to the aliens will decrease with the net effect being a better economy and less crime. Perhaps schools may improve by having fewer foreign students and more patriotism.

  • Avatar Art Webb says:

    the labor market has been artificially depressed by the ready availability of cheap labor by illegals, and we have young men who were born here seeking jobs that don’t exist, this is a market adjustment, nothing more, builders will have to raise pay, then non illegals will move to the proffession, and the pay rate will stabilize at a more equitable rate, and more young men will have decent paying jobd

    • Avatar greenlantern1 says:

      You do realize that Trump’s building were built with foreign labor?
      That his properties are staffed by foreigners?
      That Trump holds many visas for his businesses?
      How many construction workers does it take, to sell FAKE condos in Baja, Mexico

      • Avatar Art Webb says:

        Of course I know that, I JUST SAID the construction labor market is depressed in the US BECAUSE of cheap illegal immigrant labor
        Trump, like every other builder, is simply doing what is economically required
        In a market where everyone is paying low wages to illegals, only an utter fool would pay higher wages for the same work
        I give zero fucks about what Trump has done, along with EVERY OTHER BUILDER IN THE COUNTRY, as a result of the availability of cheap illegal immigrant labor, the fact is, a scarcity of labor in any market raises wages, and lowers unemployment, by sending people who are currently unemployed / underemployed into that field

        • Avatar greenlantern1 says:

          TOTAL agreement!!
          We both agree that there is a HUGE problem!
          However; why are you buying Trump’s FAKE elixir?

          • Avatar Art Webb says:

            Why do you assume I’m buying his elixir?
            All I’m saying is the market has been artificially depressed by cheap illegal labor, and removing that will cause a market adjustment. I never said anything about Trump, you did

          • Avatar greenlantern1 says:

            Isn’t Trump peddling his “cure”/
            You assume that Capitalism’s “invisible hands” will correct the problem.
            WALL STREET CLAIMS to believe in capitalism.
            It has trusts and monopolies!
            What would Adam Smith say about that?

          • Avatar Art Webb says:

            Once again, you inserted Trump into this discussion, not me. I only remarked that the presence of illegals in the market was artificially depressing the market, as it was
            Stop putting words in my mouth
            You should be questioning insttead why the ‘anti big business’ side of the political spectrum favors the retention of illegals as cheap labor, as it favored the retention of slavery not that long ago
            Capitalism, and the market, work, if left alone

          • Avatar greenlantern1 says:

            In order!!
            Ever read the autobiography, NEVER AGAIN, by John Ashcroft?
            He, not Eric Holder, ordered the rescue of illegals!
            Remember when Attorney-General Janet Reno enforced our immigration laws?
            Remember Elian Gonzales?
            Where was Trump?
            President Andrew Jackson hated banks!
            Would he have selected Nicholas Biddle for his cabinet?
            WALL STREET CLAIMS to be for capitalism!
            Why were regulations necessary in the first place?

          • Avatar Art Webb says:

            In order!
            No, I haven’t
            I never accused Holder of anything
            And?
            Yes, I do, his family was menaced by jack booted thugs with fully automatic weapons, one of which was pointed directly at him in clear violation of gun safety rules, so he could be ripped from the arms of the family who loved him and be sent to a communist hellhole
            Attending to his businesses as a business man should, why should Trum have done anything about it? he had no political power, and it wasn’t his job
            Lots of people hate banks
            Dunno, don’t care
            And they aren’t?
            To avoid chaos

            Now for some of my own
            Why do you ASSUME I’m a Trump bot? At what point have a rah-cheered Trump?
            If you want to continue tilting at windmills, I guess that’s up to you, but the dragon you think you’re battling was never here

  • Avatar greenlantern1 says:

    Secure borders?
    Ever read the Zimmerman Note?
    The HUN tried to goad Mexico into attacking us!
    Why didn’t it do so then?
    Part of the reason, our doughboys went OVER THERE, was to protect us, OVER HERE!

  • Avatar HOFFHACK says:

    Geeee! So you mean there will be good construction jobs for Americans instead of hiring a bunch of beaners? THAT BREAKS MY HEART! https://uploads.disquscdn.com/images/4ce62ded98dcea19ecfa5f8816bfe9dc291a9150a34d9512c1e67dc84b1a1296.jpg

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Trump Signs PPP Loan Extension, Labor Sec. Says ‘No’ To More Unemployment Benefits

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Trump Signs PPP Loan Extension, Labor Sec. Says ‘No’ To More Unemployment Benefits

Small business owners now have until August 8 to apply for a loan through the Paycheck Protection Program (PPP). This is thanks to a bill signed by President Trump on Saturday.

The deadline to apply was June 30. However, more than $134 billion in funding still available according to the Small Business Administration. With this, President Trump extended the deadline so more businesses could benefit from the program.

The bill signed by President Trump also separated the authorized limits for loan commitments from other lending programs offered by the Small Business Administration.

PPP Statistics

According to the SBA, the PPP had awarded more than 4.7 million forgivable loans for more than $518 billion as of June 27.

Officials in the Trump administration said on Thursday that they will begin releasing information on the companies that have received more than $150,000 from the program. This is in an effort to address complaints about large, well-funded companies. These large companies receive PPP loans while many small or independently-owned businesses struggled to receive funding.

According to the US Treasury, approximately 5,300 borrowers have received almost 2.5 million loans worth $228 billion. That is roughly 44 percent of total PPP spending.

The SBA made an effort to address another complaint by small businesses. It has lowered the percentage of the loan balance that must be used to keep employees on the payroll. Previously, if more than 25% of the loan balance was used for purposes other than keeping employees on the payroll, the loan would have to be repaid. That threshold has been reduced to 60% of the loan balance used on employee salaries to make the loan forgivable.

The Program’s Significance

President Trump credits the Paycheck Protection Program with keeping an estimated 50 million Americans employed when they would otherwise have lost their jobs, preventing the unemployment rate from worsening as the country faced an economic shutdown.

The extension of the Paycheck Protection Program had unanimous bipartisan support. However, the July 31 deadline to extend the enhanced unemployment benefits will be hotly contested.

The latest high-ranking cabinet member to come out against extending the benefits is Labor Secretary Eugene Scalia.

During an interview on Fox News Sunday, Scalia said PPP loans serve as an “essential” part of the recovery. However, he doesn’t believe that $600-a-week enhanced unemployment benefits are needed beyond their July 31.

“It was a really important thing to do as we were shutting our economy down. Americans across the country were basically being told, and we needed to take measures, but they were basically being told, you can’t go to work right now and so we needed that substantial unemployment benefit. There are some states where you can get on an annual basis $75,000 a year right now on unemployment. As we reopen the economy, I don’t think we need a benefit like that.” he said.

Scalia added, “During the so-called Great Recession 10, 12 years ago when we had a downturn, The added federal unemployment benefit was $25 a week. What we did in the CARES Act was $600 a week.”

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Trump Says Economy ‘Roaring Back’ in June As 4.8 Million Jobs Added

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Trump Says Economy ‘Roaring Back’ in June As 4.8 Million Jobs Added

The economy added back 4.8 million jobs last month, according to the government’s June jobs report released yesterday. That handily beat the 3.7 million jobs forecasted by economists and dropped the unemployment rate down to 11.1%.

After the report was released, President Trump said the economy was “extremely strong” and “roaring back” after the country has regained more than 7.5 million jobs in the last two months. Trump added that the economy will keep growing unless voters elected Democrat Joe Biden in November. He said Biden would raise taxes and hurt the economy and the stock market would “drop down to nothing.”

Jobs Added

Of the jobs added back in June, bars and restaurants hired – or rehired – 1.48 million workers. This comes as many reopened for outdoor dining in the early phases of the reopening. They brought back a similar number of workers in May. It happened after shedding more than 6 million jobs due to the pandemic.

The retail sector regained 740,000 jobs, healthcare added back 358,000 workers, and manufacturing saw 356,000 jobs added.

The energy sector continues to be battered by low oil prices amidst the economic slowdown. Additionally, that industry shed an additional 10,000 jobs last month.

The return of lower-paying jobs like those found in the restaurant and hospitality industry dragged down the average hourly wages for the second straight month.

Many are cautioning against reading too much into reports like average hourly wages while the economy is in such turmoil.

Stephen Stanley, chief economist of Amherst Pierpont Securities, says, “The wage figures will be pretty much useless for a long while until the labor market gets back to some semblance of normality.”

Andrew Chamberlain, chief economist of the job site Glassdoor, also gave an explanation. He added, “Today’s positive jobs report does provide a powerful signal of how swiftly U.S. job growth can bounce back and how rapidly businesses can reopen once the nation finally brings the coronavirus under control — a reason for optimism in coming months.”

Looking Forward

Unfortunately for many of the workers recently rehired to work in bars and restaurants, the recent spike in new coronavirus cases could lead to those jobs quickly being lost for a second time. Bars in many states are being shut down again in an effort to curb the growing number of cases.

The unemployment rate fell for the second straight month. However, the Bureau of Labor Statistics is trying to fix a reporting error that, if corrected, would increase the unemployment rate by 1%.

The problem is how households respond to the monthly survey that is used to calculate the unemployment rate. The jobless rate would have been 1 point higher if not for continued problems in how respondents answer the question about their employment status.

What many consider the “real” unemployment rate, which is the U6 rate, includes workers who can only find part-time jobs. It also includes those who’ve become too discouraged to look for jobs because so few are available. Using that measurement, the unemployment rate stands at 18% in June, down from 21.2% in May.

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Trump Says SBA Has Saved 50 Million Jobs, Issued $4.6 Billion in Loans

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Trump Says SBA Has Saved 50 Million Jobs, Issued $4.6 Billion in Loans

U.S. President Donald Trump attended a roundtable with small business leaders yesterday. There, he reported that the Small Business Administration had processed over 4.6 million loans to small businesses. He also said that this saved an estimated 50 million American jobs.

“Small business is no longer small business, it’s big business,” he said. Then, the president expressed sympathy for the 41% of black-owned businesses and 22% of all small businesses that were forced to close this year due to the coronavirus pandemic.

In discussing the Payroll Protection Program, Trump said he approved over $670 billion for PPP loans. He also mentioned that said he is working with Democrats about doing “something further.”

A Meeting With Small Business Owners

In attendance for the meeting were several small business owners who received PPP loans. According to Trump, “their businesses are on the road to recovery and they’re doing really well. We have a lot of businesses that are doing really well.”

He said “very smart Wall Streeters” originally doubted him after saying the country would experience a “v-shaped” recovery. However, the President said that they all agree with him now. This comes as the country’s economic recovery continues to do even better than expected.

“We are talking about a v-shape, we’re almost an i-shape. “I” is straight up and down, I talked about a v-shape and a lot of people disagreed with me, not everybody, but a lot of very smart Wall Streeters were disagreeing, now they are pretty much coming on board, saying it looks like it could be a “v.” So a “v” is the thing we were shooting for and it looks like that’s what we got,” according to Trump.

The President added that small businesses across the nation are now safely reopening. Trump also mentioned that the economic and jobs numbers that were just reported are setting the country up for tremendous growth.

“Last month we added a record 2.5 million jobs, it’s the highest in the history of our country in one month. That’s the highest number of jobs, 2.5 million. The Dow rose about 26,000 points and we saw the largest surge in retail sales ever recorded. Next year is shaping up to be one of the greatest years in the history of our country from an economic standpoint, I truly believe that. I think we’re going to have a great 3rd quarter, we’re going to have a great 4th quarter, and next years going to be a phenomenal year.”

The President’s Confidence

The economic growth that blossomed under his presidency was paused due to the pandemic. However, he confidently added that it’s almost a given that if we did it once, we can do it again.

“After I was elected President our country added more than 7 million jobs, 12,000 factories and trillions of dollars of wealth. We created nearly 9,000 opportunity zones, and African-American, Asian-American and Hispanic-American unemployment and poverty reached all-time lows. We had the greatest employment numbers we ever had and we had to turn it off,” the president said. He also added that “We saved millions of people by doing it, we did the right thing, and now we’re turning it back on and the numbers are going up much much faster than anybody would have thought. It’s a great honor to see it. We built the strongest economy the world has ever seen before the virus and together we are doing it again.”

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