Arnold Kling  

Robert Murphy Thinks I Fell for a Swindle

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The Enchantment of the Democra... Poorer than we thought?...

He writes,


Contrary to Sumner, there is no huge reallocation of construction workers (from January 2006 to April 2008) that Kling or the Austrians must explain.

Scott Sumner used housing starts to suggest that most of the decline in housing was behind us by the time of the financial crisis. Murphy instead looks at employment in the construction sector. Overall, about 2 million construction jobs were lost from early 2006 to late 2009. As I read it, about 800,000 of those jobs were lost in 2009. Of the remainder, about half were lost prior to the 2008 financial meltdown, and about half were lost during the meltdown (it depends a bit on whether you say the meltdown started in April or in September).

Read the whole thing (note particularly the data on unoccupied homes). Keep in mind that most of the jobs lost in the past two years were not in construction. So I do think we need a broader theory of macroeconomic job loss. Feel free to revisit If They Had Asked Me.


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COMMENTS (3 to date)
Todd writes:

I'd be interested to see the employment in housing related sectors other than construction. Anecdotally, it seemed like there were a lot of people taking up jobs as real-estate agents and mortgage brokers during the boom.

Brian Clendinen writes:

I am not sure how the numbers are collected but is that figure only for fully employed workers or are those who are under employed count for the correct fraction of a head. I know a lot of construction workers who had financial troubles due to being under employed.

I just was talking to a commercial GC who works in Brevard County, FL. He said wages have been fairly sticky, they have dropped only by a small fraction. The exception being roofers. So if the employment figures are not based on the number of hours worked in construction, I think it drastically underestimate the employment loss in construction. Otherwise it is accurate even from a total wage standpoint.

Tom Dougherty writes:

Brian,

The construction numbers are payroll employment for any person who worked or received pay during the pay period that includes the 12th of the month. So, if you worked one hour for pay during the pay period you are considered employed.

To answer your question, the employment figure is not just for "fully employed" workers. But, BLS also collects the average weekly hours for construction workers and there is not a big decline in average weekly hours. In fact it is pretty stable: 2007 it is 38.0, 2008 it is 37.8, 2009 it is 37.2 and 2010 it is 37.9.

So, while there was a big decline in construction employment in 2008 and 2009, hours were pretty stable.

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