With the newly elected administration passing sweeping and drastic changes to the tax code, President Trump, as well as the Senate, will be putting their best foot forward on implementing a massive $1 trillion infrastructure plan that is yet to enjoy a full support from the house as well as all the Senate leaders. The Donald Trump infrastructure plan consisting of railways, housing, roads, bridges, and skyscrapers which constitute an important part of American landmarks and defines our skylines is subject to long-term transformation that is anticipated to create thousands of jobs. President Trump’s administration aspires to reserve these jobs for the tradespeople and skilled craftsmen.
With the need to transform our infrastructure and enact these policies, what is the correlation between the action of Trump’s administration and the statistics from the labor force? Let’s take a keen scrutiny. Even if the new administration’s plan to invest $1 trillion will succeed in creating 4 million trade jobs during the implementation of the projects, it is anticipated that the demand for the skilled person will sharply increase in the coming years if the plan is implemented.
As per a 2016 report released by staffing agency Adecco, there is a big deficit in skilled trade job in America. The study pointed out that the number of people trained to tackle jobs that require skilled personnel are few and bound to spike skilled manpower crisis in the near future. More than 62% of the firms reported that they were finding it difficult to hire skilled professionals in the trades. The study observed that most skilled trade positions are being occupied by baby boomers, a generation that was once productive but is now nearing the age of retirement. It is projected that at least 5 million tradespeople who as in 2016 were involved in a number of trade jobs were scheduled to retire within a span of 10 years. This implies that approximately 31 million jobs will be open by 2020.
The shortage of skilled workforce would definitely throw a spanner in the works towards building a wall between US and Mexico. This is because the estimated $12-$15 billion wall project would create 21,000 jobs mainly to be taken up by tradespeople during the time the wall will be under construction. What would be the ripple effect of such a project in the US workforce? With an already low supply of trained tradespeople, a project such as this would take up the much-needed tradespeople from other projects. This would result in project delays, extensive cost overruns, and certainly infrastructure plans that would not see the light of the day.
Worse still the deportation could lead to increased foreclosures as well as infrastructure delays. Such negative impact would arise as the deportation of illegal immigrants would worsen the situation by taking off a skilled workforce from a field where a deficit already exist.
The undocumented immigrants were one of the biggest campaign platforms of President Trump. And as such, the administration has channeled its efforts on deportation of millions of undocumented immigrants, including those who have lived and worked in the country for many years and have no history of criminal offenses. Such a move will directly lead to increased foreclosures.
The direct correlation between deportation of undocumented and foreclosure rates has been studied by researchers at Cornell University. The study was motivated by the fact that there seemed to be an increased number of foreclosure from the time the deportation orders began to be executed. The reason is not that the immigrants are directly awarded mortgage loans, but because it is estimated that a third of the undocumented immigrants reside in mortgage homes owned by U.S citizen. The direct contribution from the undocumented immigrants is immersed, and sudden deportation after living and working for years, will result in non-payments of the loans and eventually American citizens losing their homes to mortgage lenders.
The escalated deportation-related foreclosures will further complicate the existing foreclosure crisis particularly for Latino families, who when compared to other race groups are worse affected by the foreclosure. The high number of Latino foreclosures is thought to be linked to the fact that the group was a specific target essentially for subprime mortgages. The researchers from Cornell University observed that as the deportation of undocumented immigrants rose, subsequently the rate of foreclosure rose with almost the same proportion. If the deportation plan is implemented as intended by President Trump where millions of undocumented immigrants will be deported, then the rate of foreclosure will sharply increase. This is because the illegal immigrants contribute immensely to the growth of real estate and the servicing of mortgages by the legal homeowners. A drastic change in such a balance would result in a crisis within the real estate.
The truth of the matter is that America won’t have the much needed workforce to meet the seemingly increasing demand for workers who are skilled if we won’t invest in training skilled trades, subsequently, reinvigorate and entice young people to train, or reach out to skilled overseas tradesmen and engineers. Such moves will help to make up the deficit that is already biting with foreclosures affecting some homeowners.
Without a highly trained workforce, who will execute the Donald Trump infrastructure plan? A vivid execution plan for a thriving real estate seems to be out of sight when skilled personnel is not available to build new houses, where home ownership is already showing signs of a decline, and at the same time housing inventory is lagging. Foreclosure is now happening at a faster rate with investors reclaiming mortgaged homes though not as much as it was back in 2008-2010.
Besides, as the rebuilding of the infrastructure in the United States remains unclear, there is quite a number of the American citizen who owns homes and are approaching mortgage defaults, or are already staring at foreclosure action. Irrespective of the presidential regime of our time, the New York court system has numerous cases of foreclosure and many homeowners are in a brink of losing their homes.
Langley Investment Holdings, LLC is the area’s premier real estate solutions company, and since our inception we have been helping homeowners along with improving communities in each and every city we work in. Our mission is to rejuvenate neighborhoods and increase the standard of living by improving the overall quality of housing for the residents. Call us today and let’s see how we can work together!