A new report in Bloomberg highlights one of the less noticeable, but most significant factors that’s impacting the current shortage of cheap labor, and indirectly, also affecting the shortage of affordable housing – immigrant’s educational level is rising significantly, and creating more problems with the housing market.
The article cites a recent report from the National Academies of Sciences, Engineering and Medicine, called “The Economic and Fiscal Consequences of Immigration”, which reveals that the average educational attainment of Mexican immigrants to the U.S. since 1970 has almost doubled, from 5.7 years of schooling to an average of 9.5 years.
“This "up-skilling" of the immigrant labor force is contributing to the country's labor and housing woes,” Conor Sen wrote in Bloomberg. “Historically, immigrants provided much of the muscle for building the nation's infrastructure.”
However, with more immigrants entering the country with better education, that’s not so anymore, as more of them look for better career alternatives that their educational level can provide. In addition, this uptick in the number of educated immigrants is also affecting demand for housing.
“Today's immigrants, many arriving with college degrees, are headed for other careers,” Sen explained. “These individuals aren't going to contribute to the supply of housing.”
There’s nothing wrong with that, and indeed, the country can benefit from having more educated immigrants in many ways. But for the real estate industry, it needs to be prepared for the shift, as more American immigrants look to buy houses rather than just make a living building them.