The Construction Industry Recovery is DOA
Construction is much worse off than anyone not in the industry can even imagine.
While construction GNP numbers are up from three percent in 2009 to eight percent (maybe) today, these figures are a far cry from the 24 to 27 percent of 2007 when business was not booming, but healthy.
Government policy ignored millions of tradesmen and women, who have been effectively frozen out of the economy due to nothing more than political ego. Politicians have no idea that for each person who works day-to-day to turn out live-space, work-space product, six workers are required for everyday support occupations.
For example, a steel bender for foundations buys food, pays rent, contracts utilities, hires medical people, and uses gasoline. The magic ratio is 1:6, and this is a minimum standard when things are at a normal, no frills, subsistence level. Conditions have not been such for at least four years.
Unemployment statistics do not include independent tradespeople because, unless one belongs to a large construction company, most of the work is freelance, done by small contractors who depend on a normal economy for work projects. Millions make their living like this. They account for fully 20 percent of the GNP, but with no statistical representation, the skilled worker has no presence in government overview.
One might offer that union signatories appear to thrive, and while this might be true, only seven to eight percent of construction employment is union, leaving more than 90 percent of a work force either idle or in a less than full-time condition. The Department of Labor is useless because its focus lately has been its marriage to unions. Independent construction is merely the redheaded offspring because of his “outlaw” status.
The very idea of “shovel ready jobs” was laugh-out-loud ridiculous on its face. Everyone in construction knew the phrase was lip service to organized labor and financial interests. It was spoken by government to government in an attempt to mollify effects that would endure for years, an egotistical ploy that had no basis in research or fact.
The economic collapse of 2007 affected construction more quickly and more vividly than any other sector of the economy besides the financial sector. Projects underway continued, but the die was cast. Construction folded so anonymously that no media outlet covered the demise with more than a passing mention, after which it was conveniently dismissed from public-at-large consciousness because it did not fit the narrative of new and exciting leadership.
A distinct class of American worker vanished.
This writer knows whereof he speaks because he was in the business, had been for over 40 years, doing concrete foundation and framing as a private business. By 2012, when the recovery was supposed to kick in per government wonks, the writing was on the wall, and it wasn’t layout for electrical outlets. He simply paid off outstanding accounts, wrote letters of recommendation for his people, and kissed it goodbye, as did many, many others.
One of the things this writer did instead was mount a website called contractorside.com, where independent workers in construction trades can air comments about their experiences doing business in the current climate. As an enhancement, a Contractors, Trades Person Survey has been offered for tradespeople to outline the states of their personal lives.
The preliminary results are enlightening:
- 39 percent have applied for food stamps
- 100 percent say business is significantly off from six years ago
- 40 percent are not optimistic about near-term work
- 60 percent struggle
- 77 percent consider changing careers
- 72 percent have taken supplementary menial jobs
- 68 percent are on government assistance of one form or another
- 54 percent cannot qualify for credit
- 89 percent borrow from family or friends to make ends meet
- 88 percent cannot afford insurance or qualify for ACA (i.e., Obamacare)
On the business side of the equation, 20 percent think government can help reverse the downturn, but 80 percent think only business can make it happen. Oddly, 65 percent believe government and its regulating agencies are to blame for industry woes, and tradespeople are specific when placing responsibility.
One example of government obliviousness is the appointment of Gina McCarthy as head of the EPA. McCarthy blithely commented that climate change would not affect jobs. This terminally stupid wonk, quite adept as a culinary wizard and kitchen inspector, is positive that the little people (like the ones who built houses she can’t afford because she made Boston Harbor so nice) will make do with a tent when she regulates mid-range housing out of affordability.
This entire administration carries the same focus without regard or market research as to the effects of elitist rules. It would appear that no one even questions how rules affect the economic stability of one-quarter of the producing population.
It is a given that half of entry-level jobs were in the construction industry because a willingness to work, perspire, and put forth effort was what was required. This no longer exists. With minority youth employment standing still at better than 60 percent, where can they begin a career, or work to put themselves through school?
What can be done?
Since most of these people delegated to work for the nation have done a day’s work to put food on the table via sweat of the brow, it might be a good idea if they mingled with a few savages, and most importantly, asked questions. It’s late to the game, but it’s a start.
And, by the way, asking the right questions without agenda or ego would help.