The unemployment rate in America is one of the top issues facing our country. It was last reported at 9 percent in April of 2011. While this is something that the president and government are focused on, they are working on job growth as a solution for getting America back to work. Job growth and unemployment may not effect each other quite as directly as one might assume.
The areas of our country that are most affected by unemployment are also some of the hardest hit in terms of property values falling, people underwater on their mortgages, and lack of new construction in both commercial and non-commercial areas. Anirban Basu, Associated Builders and Contractors (ABC) chief economist, pointed out, during our recent conversation, that job creation was unlikely to help the areas hardest hit by unemployment and housing market subprime mortgage crisis.
The problem, as he sees it, is that the jobs created by the government are in sectors like green industries, alternative energies, the technology sector and jobs that are more technical. Basu points out that many of those out of work at the moment will not have the skills needed to fill the positions being created. An example of this is high unemployment in Southern California despite the alternative energy boom and job creation in that area. In the past when there was a higher than normal unemployment rate in the country, people had more freedom to pick up and move to where the jobs were. That freedom is gone for many people. They are stuck in their houses, their mortgages, and in their geographic areas like never before.
Reeducating the unemployed and unemployable may have some impact on non-residential construction. For-profit colleges and universities, like University of Phoenix, are gaining traction and popularity. They are growing and taking over empty office space or even breaking ground on new construction. Community colleges are also growing and many times those projects are funded by state and local governments which may not have the same construction restrictions on them that the federal government does. Basu said, “Education growth will effect the Construction Backlog Indicator (CBI) positively. It will be a good source of ongoing job creation and construction demand.”
Though re-educating America’s workforce will be an continuous project, Basu sees a brighter future; we will see a turn around in the housing market, construction and employment by 2014.