The market is efficient. You raise prices and pay workers more -> Fewer people are willing to purchase at that price -> You make less profit -> You don't make enough profit to pay people more. It's a complex problem. You could make the same market argument as: if it was profitable to charge more and pay workers more, why doesn't anyone just start a company that does that and outcompete the others?

> The market is efficient.

The market is more efficient, on average, than other methods of price setting. It’s not perfect efficiency (or even close to it).

Supply and demand are always in flux, and the repeated attempts to match these is what causes market efficiency. It is frequently possible that prices are not keeping up with supply and demand, and there exists arbitrage opportunity that requires people knowledgeable about the market to act on.

> if it was profitable to charge more and pay workers more, why doesn't anyone just start a company that does that and outcompete the others?

They do (sans outcompeting). We just call them luxury goods. It's a different market.

Yes, and figuring out how to get orders of magnitude more housing production at dramatically lower prices is one of the most socially and morally important problems in the world today.

Not really. Most of the cost of housing is land anywhere it’s expensive. We have the technology to stack dwellings vertically. Where that’s illegal and there’s lots of demand housing is expensive. Otherwise not.

Is construction labor really a big factor in the final selling or rental price of a home?

Apparently labour is ~35% of the cost of a house [1] though I imagine this varies a lot depending on the house being built, type of construction, location etc. Still, seems safe to assume labour is a large part of the cost.

[1] https://www.homebuilding.co.uk/advice/how-much-does-it-cost-...

>Still, seems safe to assume labour is a large part of the cost.

Does it? I've read time and again that land is the largest part of the cost - in any place where cost is significant.

Just to clarify, Im saying labor is a large part of the cost, not necessarily the largest. I agree land is probably a bigger cost in a lot of areas.

Yeah, I would think in a city with a runaway housing market (like Vancouver), it's more like 5%

Idk labor rates have also run away

then you lose to cheaper competitors.

there is a market for hand-made furniture but Ikea stuff dominates.

> there is a market for hand-made furniture but Ikea stuff dominates.

And boyyyyy is there a gap between these. I feel like I’m either paid $100 for shitty pressboard or thousands upon thousands for hardwood.

Thankfully, there are some decent pieces left from 50 or so years ago that are both solid and dirt cheap at thrift/antique shops.