Slump Removes Hard Hats' Ladder to Prosperity

In recent years, men without college degrees, who found it difficult to get the factory jobs that sustained their counterparts in decades past, have turned to construction work to climb into the American middle class.

What Will Become of Blue-Collar Men? By the peak of the housing boom in 2006, construction surpassed manufacturing as the biggest employer of men with at most twelve years of schooling. About 19.5% worked in construction, compared with 19.2% in manufacturing, according to an analysis of Census Bureau data by the Economic Policy Institute. Before the deep recession of the 1980s, 12% worked in construction and 36% in manufacturing. Hourly wages for those with less than a high school degree grew faster than wages of those with college and advanced degrees this decade, according to EPI.

Men with no more than a high school education working in construction earned an average of $17.34 an hour in 2006, a 20% premium to their peers in, for example, the service sector, according to Lawrence Katz, a Harvard University economist. "The housing boom helped less-educated men in particular," he said.

But that work evaporated with the housing bust, and then the commercial real estate collapse. And while the recession may be ending, construction is unlikely to return to pre-boom levels for many years, despite the jobs generated by the government's stimulus efforts. That's left this group of workers who lack post-high school education with few job prospects in a labor market that increasingly favors brains over brawn.

Construction, which currently employs about 5% of all workers outside agriculture, has accounted for about 18% of the nation's job loss in the past year. Construction has given back the 1.1 million jobs it added during the boom, plus half a million more. The industry, which employed 7.7 million Americans at its peak, has seen total employment fall 20% since January 2007, according to the Labor Department.

Naples Florida gives a sense of the fallout. Once a sleepy resort town, it was transformed in less than two decades by a flood of well-off retiees and vacationers, and by developers eager for a piece of their wealth. Growth reached a frenzy mid-decade amid an influx of migrants from other parts of the U.S. and Latin America. The city's work force grew by one-third from 2003 to 2006. One of four jobs added was in construction, which by mid-2006 employed about 18% of Naples's workers.

The ensuing bust wiped out Naples's construction job growth -- and then some. As of August, the Naples metropolitan area had roughly 11,600 workers in construction, according to Florida's labor department, a 50% drop from the peak. The metro area's unemployment rate stands at 12.6%, as of August, compared with 8.5% a year earlier.

Construction's decline, here and elsewhere, has fallen hardest on the least-educated men and particularly Hispanics, who represent 14% of the overall labor force but held one in four construction jobs nationwide before the bust, according to the Pew Hispanic Center.

The bust has left families like the Kings devastated. Mr. King hasn't found construction work in over two years. A couple stints -- working on a hotel loading dock and then as a night stocker with Walmart Stores Inc. -- proved short-lived, as Mr. King saw his hours cut and his take-home pay dwindle to less than what he could receive on unemployment. While Mr. King continues looking for construction work, the family has traded their home for a smaller one on a busy corner.

Despite their troubles, the Kings consider themselves relatively lucky. By renting rather than buying, they have avoided a mortgage they can no longer afford. And after Rita King, 43, lost her teaching job at a school for at-risk kids, she landed a position as a receptionist.

Many others waylaid by the industry's collapse have less to fall back on.

Source: Wall Street Journal, Kelly Evans, 10/1/09