Job losses appear minor during major housing slump
According to the Chicago Tribune
, even though the U.S.'s slump in home building is the deepest since 1990, it seems the U.S. job market has taken a minor hit. During the past year, housing-related jobs have declined only about 2 percent—yet housing starts were off by about one-third.
This discrepancy could partly be because many of the workers who have lost their jobs are undocumented immigrants, who often go uncounted when tabulating job loss. This means official labor statistics don't completely reflect the decline in construction-related jobs.
Many independent contractors, who make up more than 20 percent of all construction workers, also are taken out of the equation. According to Daniel Jester, an economist at Moody's Economy.com, West Chester, Pa., the U.S. Department of Labor's establishment survey—which covers companies larger than 1,000 employees, as well as a random sampling of smaller firms—does not capture independent contractors. Nor are these contractors included in the government's weekly figures on filing for unemployment claims.
"Both the establishment survey and claims data may be missing out on a significant portion of the construction work force," Jester says. "It is these employees who are likely the first to be let go once a construction project is complete."
So even as job growth slows, the number of jobless claims has been relatively low. Weekly claims, which tend to decline as payrolls increase, averaged 320,000 this year compared with 313,000 last year. This year's monthly payroll growth has averaged 130,000 compared with last year's 189,000. Payrolls increased by 157,000 in May, and the jobless rate remained at 4.5 percent.
"Anyone who's not working legally in the U.S., chances are there is no unemployment insurance paid, and, therefore, they are ineligible to file for insurance," says Christopher Low, chief economist at FTN Financial, New York.
According to Credit Suisse Holdings Inc., New York, about 173,000 housing-related payroll jobs—including builders and construction materials manufacturers—have been lost during the past year. Jay Feldman, senior economist at Credit Suisse Holdings, says as many as 250,000 more may be lost.
Date : 6/27/2007