COVID-19

The construction industry’s getting back to work after shedding a million jobs

Amy Scott Jun 2, 2020
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A house being built in Phoenix. Residential construction fell 4.5% in May due to the COVID-19 pandemic. Justin Sullivan/Getty Images
COVID-19

The construction industry’s getting back to work after shedding a million jobs

Amy Scott Jun 2, 2020
Heard on:
A house being built in Phoenix. Residential construction fell 4.5% in May due to the COVID-19 pandemic. Justin Sullivan/Getty Images
HTML EMBED:
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Among the economic data out this week: Spending on construction projects fell by nearly 3% in May. That figure from the Census Bureau may not sound terrible, considering that residential building saw a bigger decline: 4.5%. But behind those numbers, there are a lot of lost jobs — almost a million in an industry that hadn’t fully recovered from the last recession.

Earl McPherson has been a carpenter in New Jersey for 28 years. When the pandemic shut down a lot of construction in mid-March, he lost his job installing floors at the American Dream shopping center in East Rutherford.

Aside from a couple of days helping to build a temporary hospital for COVID-19 patients, he was out of work for six weeks.

“I was fortunate enough that we had savings, and I’m very grateful for that,” McPherson said. “But it’s all gone now, so now we have to build it back up.”

He’s back at work now building a veterinary hospital, but more layoffs are likely. Ken Simonson is chief economist with the Associated General Contractors of America. In the group’s latest survey, 40% of firms said at least one expected project had been canceled.

“I do expect that many more construction firms are going to have to lay off workers as they finish up current projects,” Simonson said.

That’s a big change from just months ago, when the industry was facing a labor shortage. Rob Dietz, chief economist of the National Association of Home Builders, said more than 400,000 residential construction workers lost their jobs last month.

“And that represented about 14% of the workforce,” Dietz said. “More discouragingly, it represented almost half of the job gains that we had picked up since the end of the Great Recession.”

And, as happened then, he worries that some workers who lose their jobs now may never come back. Mark Altobelli is back on the job in Youngstown, Ohio, after six weeks of being unemployed. While he was off, his employer sent him $200 a week to supplement his unemployment benefits.

Between that and not having to pay for child care, he said, he actually came out ahead.

“I probably went back to work and took roughly a 30% pay cut,” Altobelli said, laughing. Still, he said he’s happy to be working.

COVID-19 Economy FAQs

Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?

This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.

Could waiving patents increase the global supply of COVID-19 vaccines?

India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.

Can businesses deny you entry if you don’t have a vaccine passport?

As more Americans get vaccinated against COVID-19 and the economy begins reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.

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