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Companies Turn To Convicts To Fill "Skilled Labor Shortage"; Ignore 95 Million "Out Of Labor Force"

A lot of time has been spent of late discussing the apparent "labor shortage" in the U.S. economy.  In fact, just this morning, the Wall Street Journal ran an alarming headline alleging that the market for "skilled labor" has become so tight that housing companies across the nation are having to recruit convicted felons in order to keep up with building demands. 

Erickson Cos., a Chandler, Ariz., based construction firm, has hired almost 30 former inmates from Arizona state prisons over the past year to build frames for new homes, an effort to cope with skilled-labor scarcity.

 

“We’re searching for every alternative avenue that we possibly can to help solve this labor shortage,” Rich Gallagher, Erickson’s chief executive, said in an interview.

 

Erickson is part of what appears to be a nationwide trend. As the jobless rate falls, employers in places including Arizona, Indiana and Maryland are scouring the fringes of the labor market for able-bodied workers, including ex-offenders.

 

Erickson, which has about 250 employees in Arizona and roughly 1,000 nationwide, has been recruiting directly from corrections department job fairs for prisoners nearing release. Karen Hellman, director of inmate programs and re-entry, said there has been a noticeable uptick in companies looking to hire inmates this year.

 

“I’ve never dealt with employers who are more willing to hire ex-felons,” said John Nally, who started working at the Indiana Department of Correction in 1967 and is now its director of education. “It is a totally different landscape when you have an unemployment rate of 3.6%. We have all these people in construction who are literally begging for workers.”

And with more than 600,000 sentenced prisoners nationwide released from state or federal prisons each year, ex-cons do offer a steady, if somewhat risky, stream of potential applicants.

 

That said, we continue to be somewhat perplexed by the apparent 'labor shortage' plaguing the the U.S. economy.  As Goldman's econ team pointed out earlier today, the lack of wage growth among recent graduates seems to be somewhat inconsistent with an economy experiencing true labor shortages. 

 

Of course, maybe that's because there isn't really a "labor shortage" at all, but rather, a massive skills gap resulting from decades of American youth being indoctrinated with the notion that focusing on obtaining a skills-based trade job, rather than going to college, was somehow demeaning, racist and/or misogynistic. 

You know, because throwing 10's of thousands of dollars at millions of high school kids who will use their taxpayer-subsidized student loans for hedonistic, binge-drinking spring break trips to Cancun, all while 'earning' a 1.5 GPA in anthropology from a state school and then returning to mom's basement with no job after graduation, is just so much more enlightened and progressive.

Meanwhile, the cost of that progressivism is an economy that has ~95 million people who have voluntarily taken themselves out of the labor force, many because they simply don't possess the right skills or are unwilling to take jobs that they've been convinced are 'demeaning.'

 

Of course, for those who still aren't convinced....perhaps you have another explanation for why over 30% of the ~75 million 18-34 year olds in this country (roughly 22.5 million people) are currently living at home with mom and dad?