How might one think about the present informal marketplace, and the degree to which it is utilized in the U.S.? Even though we know it's there: who really stops to think how these services help populations and communities in general. A recent post by Scott Sumner at Econlog also includes some interesting back and forth in comments as to an existing underground marketplace for "unskilled" services. Hmm, some of that work I would scarcely have the energy to carry out over an eight hour stretch, unskilled though it may be designated. In this post I want to consider whether the potential for these kinds of services is being met, to the degree they are actually needed.
Many home maintenance services we now expect to provide or partake of, depend upon one's region, prevailing income levels and accessibility to urban areas. For instance, this is likely to be a much more dynamic marketplace if a major city is only an hour away. Rural areas might be practically devoid of retail options and yet still have home maintenance provisions available, because of transportation access to urban areas nearby.
Such fortunate environments translate into service provisions which can still be shared by locals and immigrants alike. Whereas when I lived in a rural area several hours from a major city, locals were more likely to engage in "do it yourself" projects and routines. That anti-economic context (except for home improvement stores) applied not just for basic service applications, but more complex projects as well. Some of these do it yourself "outbacks" appear to be more racially segregated, rather than by class or income. In far flung rural areas, maintenance opportunities tend to come from either higher income households or bed and breakfast operations for tourists. This creates a situation where outsiders may be viewed as contenders for the work that exists, even if those jobs are as basic as home maintenance.
The main problem I observed re "hard core" do it yourself folk, was when a home was built by its owners without any mortgage. Unfortunately, the legal system can sometimes do little to assist a home's occupants, when a marriage fails. There's no dividing a solid home, especially when one's income won't cover the legal expenses! Oddly enough, observing this sad circumstance gave me what little respect I have for a thirty year mortgage: at least the mortgage gives both parties a chance to start over in their lives. When a home has a shared and unpaid obligation, people seem to act more reasonably - even if only because of the financial incentive to do so. And when people have a loan on their residence, there's a better chance that both of them remain in the workplace to tend to it, which allows them to pay others to build their homes for them.
Is there still room for growth in home maintenance services? I thought about that, after a long awaited repair job was recently completed. Decades of water damage had meant getting rid of sheetrock which never should have existed next to plumbing, and replacing it with water resistant board and new tile. The repairman did such a good job that I knew I'd want to hire him again in the future. And yet, he was hoping to gain work for his wife, who he promoted thus: "work around the home with a woman's touch". I felt bad that I would probably not be able to take him up on that offer.
Certainly I'm not alone in the compulsion to do as much as possible, myself. Let alone the fact that more people in their eighties (even nineties) still climb up on ladders than anyone really wants to think about. Unfortunately, homes tend to age along with their occupants. That means just about the time the occupants need to spend more money on care from others, their homes are often in need of the same. But depending on income, one's home may or may not get the attention it needs.
Considering how much of our wealth is tied up in homes, degraded capital then has to be factored in. That in turn affects not only the existing capital which communities rely upon for taxation, but how groups in general feel, as to their collective ability to meet ongoing challenges. This is one of the very real dangers of the present: expecting recognizable wealth to automatically generate income flows, just because it is there I suppose.
Will the marketplace for home maintenance needs be limited to mostly those with higher incomes and more "dynamic" regions in the future? If so, many communities stand to lose more wealth, than is presently recognized. Some forms of work subsidies could help, by making it possible for individuals to hire other individuals for needed work when they otherwise could not. The greatest need is for that of lower income individuals, to be able pay others for problems when they arise. Too often the possibility of hiring someone is ruled out - just as it is needed most - because so much income has already been delegated to ongoing health care needs.
Of course, there are many hurdles to overcome before government assisted wage subsidies could become a reality. Today we are going in the opposite direction: one in which companies and individuals alike are expected to pay higher wages in spite of a post recessionary environment. That means lower to middle income individuals in many regions will continue doing the work themselves, if in fact it is going to get done at all. Even though home maintenance work is a limited facet of the services environment, no one should ignore the importance it holds for the economy as a whole. This is a marketplace which needs to exist both for those who depend on it, as well as those who are quite willing to provide it.