Todd Hitt is chief executive of Kiddar Capital, a private equity firm.
In Houston, we have a problem. It's a crisis that will impede the reconstruction of our nation's fourth-largest city. The problem isn't capital, though. It's labor.
Here's what federal lawmakers need to understand: If Congress gave the Gulf Coast every dollar it needs to rebuild tomorrow, the construction industry simply would not find enough workers to keep up with demand.
Even before Hurricane Harvey made landfall, 69 percent of Texas contractors had trouble filling jobs. Now, it's estimated that 200,000 Houston homes will require work or complete reconstruction. Who will build these houses? What about the commercial infrastructure and public schools, highways and bridges that also sustained so much damage?
We face an infrastructure deficit in this country totaling $2 trillion over 10 years. The storms have added tens of billions to this figure. Lawmakers focus on who's going to pay for all of this, but they also must think about who's going to build it.
This problem is one that plagues the whole nation, and it's effectively "corked" our economy. We're stymied. We're stifled. Right now, the largest construction companies in America are turning away hundreds of millions of dollars in work every quarter because they don't have enough bodies on their crews. The National Association of Homebuilders reports that 77 percent of U.S. builders can't find enough people for their framing teams. Sixty-one percent can't find enough drywall installation workers. The number of construction jobs available in the United States rose in June, and it increased again in July.
The labor crisis has hit all sectors. In July, there were 6.2 million unfilled jobs in the United States. That's a record high. This country doesn't have enough people to manufacture and build things. Corporate America, meanwhile, is sitting on $2.3 trillion in cash — more than ever. We can uncork some of that capital by increasing our labor supply. Congress has to take the reins there.
One way to do that is to completely overhaul our broken immigration system. The last comprehensive reform was in 1986. Our visa system fails to match supply with demand. Congress must rebalance the numbers and even consider increasing legal immigration so we can attract all the workers we need — high skill, low skill and no skill. As Sen. Jeff Flake (R-Ariz.) said in a recent op-ed, we can't forget that the ability to work hard sometimes is the only skill a job requires.
But able-bodied workers already in this country are equally important. Mobilizing our workforce will take a multi-pronged economic program that includes a massive tax overhaul and reform of labor regulations. It will also require a historic jobs bill that reflects a vast rethinking of how we educate and train individuals and match them to employers.
There are Americans who are not employed but want to be. There are others who want better-paying jobs and possess the skills to get hired, but because our economy is stuck, they're stuck. The Economic Innovation Group recently reported last week that the vast majority of new jobs created in our country are in the nation's wealthiest neighborhoods. Poorer communities are losing businesses and entrepreneurs. Individuals in these communities have few opportunities, and, according to the EIG, most are relying on a high school diploma or less to get them an interview.
These people can't just move to growing urban centers because they cannot afford it. After two recessions, the median income has only recently climbed back up to the level it was in 1999. Try contemplating jumping on a jet plane to Houston for an interview when you haven't been able to save anything in the past 20 years. The car you've been nursing since you last had a raise also won't get you there.
Americans are angry now, but if Washington doesn't enact the policies we need to uncork this economy, it will get worse. Wages will be stagnant for another two decades; the communities that are underwater today will vanish along with the American Dream; and Houston? Well, it will still have a problem.