Former Fed Reserve Banker: Houston Will Need ‘Mexican Labor’ To Rebuild After Harvey

Will Racke, Daily Caller, August 30, 2017

As much of the Houston metro area remains submerged in the wake of Hurricane Harvey, economists are turning their attention to the enormous cost of rebuilding America’s fourth-largest city and energy industry capital.

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To restore all of that lost value, Houston will need to add thousands of workers to its construction industry labor force. According to Richard Fisher, the former president of the Federal Reserve Bank of Dallas, the city needs to open its arms to immigrant workers if is to fully absorb and recover from Harvey’s destruction.

“All these business will have to be reconstructed,” Fisher told The Wall Street Journal. “That’s an enormous opportunity, but you can’t rebuild Houston without Mexican labor.”

Some construction industry groups worry there aren’t enough immigrants workers in Texas and across the U.S. to staff the rebuilding effort.

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There are indications that the construction labor shortage in Texas may be overstated. A July report from the Center for Economic and Policy Research (CEPR) shows plenty of slack in the construction labor market, despite declining unemployment in the economy as a whole. The CEPR study looked at data and found that there are 3.3 unemployed construction workers for every 2.5 job openings, a much wider gap than the all-sector average, which has 1.2 unemployed workers for every 1.3 job openings.

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These figures suggest there are unemployed or underemployed workers whom Texas builders could recruit to rebuild Houston. Part of that strategy could also include offering higher pay to match wage growth in other sectors of the economy.

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