The Great Construction Worker Mystery

More

Since the end of the housing boom, it's been a long, silent season for the construction industry. Spending on building projects is down 32 percent from its 2006 highs. Residential. Non-residential. It doesn't matter. There's no recovery.

And yet, something odd is happening. Unemployment among construction workers is actually dropping faster than across the economy as a whole.

Here's the construction bust in a graph, courtesy of FRED. Spending is bouncing back like a half-inflated basketball.

Construction_Spending_2005_2012.png


Just as you'd expect, the actual number of employed construction workers is still near its previous low. There are about 30,000 more construction workers employed than there were a year ago, out of a total for more than 5.5 million.

Screen shot 2012-03-30 at 2.41.02 PM.png

But here's where things get weird. Yesterday, researchers at the Federal Reserve Bank of New York posted this graph tracking the unemployment rate for construction workers. The unemployment rate for the entire U.S. is in blue, and its scale is on the left. Construction is in red, and its scale is on the right. 

Construction_Workers.png

Constructions unemployment is horrible, at 16 percent, but it's also somehow dropping faster than the national average. This is happening despite the fact that the sector has been adding jobs more slowly than the economy as a whole.  Not only that, but construction unemployment peaked in 2010, before spending in the industry began its rebound.

It gets weirder: Despite the fact that their industry has been decimated by the recession, construction workers now make up the same share of the unemployed as they did in 2007 -- i.e., before the recession. Again, from the NY Fed: 

Construction_As_Share_of_Unemployed.png

But wait! you say. There are obvious answers here. Construction workers could just be finding jobs in other fields, or leaving the workforce altogether. After all, if you're not hunting for a job, you're not counted towards the unemployment figure. Both of those explanations would make perfect sense, if they were true. 

According to the Fed's researchers, employees in construction are actually leaving the workforce at a slower rate than the general population (as shown in the graph below). Meanwhile, there's no sign they've had to switch industries to find work. In 2005, more than 30 percent of unemployed construction workers had to change their line of work to get a new job. Now, fewer than 30 percent have to. 

Construction_Workforce_Participation.png

So construction spending is way down. Construction jobs are scant. But construction's unemployment rate is falling faster than the economy, even though workers aren't finding new careers are leaving the workforce. What's happening? Beats me. Explanations appreciated. 

>

Jump to comments
Presented by

Jordan Weissmann is a senior associate editor at The Atlantic.

Get Today's Top Stories in Your Inbox (preview)

A Fascinating Short Film About the Multiverse

If life is a series of infinite possibilities, what does it mean to be alive?


Elsewhere on the web

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

The Death of Film

You'll never hear the whirring sound of a projector again.

Video

How to Hunt With Poison Darts

A Borneo hunter explains one of his tribe's oldest customs: the art of the blowpipe

Video

A Delightful, Pixar-Inspired Cartoon

An action figure and his reluctant sidekick trek across a kitchen in search of treasure.

Video

I Am an Undocumented Immigrant

"I look like a typical young American."

Video

Why Did I Study Physics?

Using hand-drawn cartoons to explain an academic passion

Writers

Up
Down

More in Business

Just In