Labor as a Siting Decision and a Reallocation Game
Two truths sit at the center of trades labor. First, a deep local pool in the specific trades you need, net of everything already committed nearby, is a first-order siting advantage: cheaper, more stable, and faster to mobilize than a job staffed by travelers on per-diems. Second, capital cannot grow that pool in the short run; it can only reallocate it. A well-funded project does not create welders, it bids existing ones away, and every hire is a transfer from somewhere else. Wages rise because a fixed supply is auctioned among competing projects, not because training got dearer. Money sets the allocation but never the size. The ceiling on how fast the industry can build stays exactly where the training clock left it.
Knowledge check
In the short run, what does a well-funded project actually buy when it pays a premium for scarce trades, and what does it not buy?
Show the answer
It buys reallocation, not expansion. The premium bids existing, already-employed workers away from other jobs, so the crews show up while the total regional stock of qualified labor is unchanged. Every project those workers left is now short-handed. Wages, per-diems, and bonuses exist to decide who gets the fixed supply, not to grow it; only apprenticeship, immigration, and the training pipeline grow the stock, and those work on a scale of years.