COVID-19

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

Amy Scott Jun 2, 2020
Heard on: Marketplace
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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
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:
COPY

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

Are states ready to roll out COVID-19 vaccines?

Claire Hannan, executive director of the nonprofit Association of Immunization Managers, which represents state health officials, said states have been making good progress in their preparations. And we could have several vaccines pretty soon. But states still need more funding, she said. Hannan doesn’t think a lack of additional funding would hold up distribution initially, but it could cause problems down the road. “It’s really worrisome that Congress may not pass funding or that there’s information circulating saying that states don’t need additional funding,” she said.

How is the service industry dealing with the return of coronavirus restrictions?

Without another round of something like the Paycheck Protection Program, which kept a lot of businesses afloat during the pandemic’s early stages, the outlook is bleak for places like restaurants. Some in the San Francisco Bay Area, for example, only got one week of indoor dining back before cases rose and restrictions went back into effect. Restaurant owners are revamping their business models in an effort to survive while waiting to see if they’ll be able to get more aid.

How are hospitals handling the nationwide surge in COVID-19 cases?

As the pandemic surges and more medical professionals themselves are coming down with COVID, nearly 1 in 5 hospitals in the country report having a critical shortage of staff, according to data from the Department of Health and Human Services. One of the knock-on effects of staff shortages is that people who have other medical needs are being asked to wait.

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