In the recent years clamour over the soaring costs of houses when related to incomes, two salient factors are overlooked. The first is that house-building is a highly labour intensive activity.
When I was a child living in a Lower Hutt state house district, for a period of 2 years in the post-war years we hardly saw our father. Like my mother, he had left school at 12 years of age. For those 2 years he was absent when my sisters and I woke, and not home 4 nights of the week when we went to bed. Why? Because he was employed in an Upper Hutt factory involving a half hour bus trip, working seven days a week and four nights over-time.
In return we lived a spartan existence. So too with our neighbours, all working class folk, including 3 who were carpenters, or in other words; skilled tradesmen. In short wages back then were meagre compared with today.
Two significant things have changed.
First, global trade has massively reduced the costs of everyday goods and technology has similarly played a major cost-reducing role. For someone of my generation, reading the full-page Warehouse advertisements and noting the costs of everyday items is like looking at a fairy story.
These factors enabled substantial wage increases for skilled tradesmen and, house-building being labour intensive has seen its cost compared with low wages yesteryear increase dramatically.
The second reason is hard reality and I’m not taking the mickey.
That is that productivity is dramatically down thanks solely to bloody cell-phone addiction.
I’ve told this story before but it’s worth repeating.
Driving with well-known former Auckland lawyer Geoff Cone about a decade back I made this point and claimed that on any building site at any given time, at least half the workers would be bawling into cell-phones. Geoff accused me of hyperbole.
Then we came across an apartment development in its final stages. Various sub-contractors’ vehicles surrounded it. So I had a bet with Geoff that at least half the workers would be babbling on phones.
We duly entered and counted 20 tradesmen, many self-employed, of whom 19 (I’m not making this up) were slouching against the wall, bawling into phones. If you don’t believe this then walk onto any building site and see for yourself.
My company spends many tens of millions annually on building works (fit-outs, correcting architects design errors etc) and are well familiar with this.
If cell-phones could somehow be dismantled by a government action for a year, theoretically there would be a massive increase in productivity.
But then again the law of unintended consequences would probably come into play, namely a huge shortage of workers as so many of them would end up in psychiatric outfits suffering from extreme withdrawal symptoms.