Annie Lowrey of Slate explains why the news that construction industry unemployment has fallen isn’t as encouraging as one might think:
So why has the unemployment rate dropped so much—from a high of 27.1 percent in February 2010 to 13.6 percent last month—if the industry is ailing so badly? The answer is that since the beginning of the year, construction workers have fled the industry. Each unemployment rate has a numerator (workers looking for jobs) and a denominator (workers looking for jobs and workers with jobs). The number of workers with jobs in construction has remained fairly stable over the last 18 months. Looking at seasonally adjusted data, in February 2010, it was 5.5 million. Last month, it was 5.5 million. (At its peak, April 2006, that number was 7.7 million.) It’s the number of workers without jobs that has fallen, from 2.4 million in February 2010 to 1.1 million last month.
This leads me to Jeff Goldberg’s latest column, which discusses a new book by the profoundly pessimistic Don Peck:
About three-quarters of the 8 million jobs that disappeared in 2008 and 2009 were held by men, and many industries dominated by men, such as construction, were devastated. The economy now needs nurses, not assembly-line workers. Men can and do work as nurses, but many men — and especially, Peck says, men who pride themselves on the toughness of their jobs — loathe the idea of work in what they see as feminized fields. And they are terrified by the thought of returning to the classroom. So what do they do instead?
“They leave the workforce,” Peck told me. “In 1967, among men with a high-school degree between the ages of 30 and 50, 97 percent had jobs. Today, it’s 76 percent. There are a lot of guys who are just leaving the workforce.”
What happens next, of course, is disaster.
“When you have these communities where you have a lot of people without much education, and all of a sudden the construction and manufacturing jobs are lost, the guys don’t know what to do, and the whole community changes,” Peck said. “You have a very low marriage rate, but women still want to have kids and do have kids. Couples just don’t stay together.”
He went on, “These men derive so much of their sense of self-worth from their jobs, and that translates into happy marriages, good family, strong churches and civic life, clean streets, deep friendships, lower rates of domestic violence, far less drinking and much more stability generally.”
Peck points to a survey from last year that found that, among people unemployed for seven months or more, 46 percent said they had become quick to anger; a majority said they tried to avoid encountering friends and acquaintances; and 14 percent said they had become substance abusers. Rates of out-of-wedlock births that were once seen as socially catastrophic are now the norm in some communities.
Peck advocates large-scale fiscal stimulus, focused on public works projects. I’ve called for infrastructure investment in the past, though I don’t think of it in the framework of fiscal stimulus as such, a subtlety that matters to me but that I’m sure won’t matter to most. Though I haven’t read Peck’s book (yet), he is doing a great service by describing the consequences of long-term unemployment in vivid detail.
We should underline, however, that critics of temporary fiscal stimulus maintain that their approach, i.e., implementing sustainable long-term fiscal policies, is more conducive to long-term growth and high levels of employment. The obvious rejoinder is that we’re not really having a debate between sustainable long-term policies and unsustainable short-term policies. Rather, we’re having a debate between two different flavors of unsustainable short-term policies, which is exactly as encouraging as you’d expect.