In the past five years, more than 2 million construction jobs have disappeared in America. That's huge. Construction accounts for just one twentieth of all U.S. jobs, but for a third of the jobs lost since the start of the recession.
Of course, five years ago was the peak of a massive real estate bubble. There was too much building going on. A healthy economy would never have created that many construction jobs in the first place.
Today, the construction industry is in a massive slump. Things are brightening a bit, but the pace of construction is still near historic lows. In the space of a few years, we went from freakishly many construction jobs to freakishly few.
This raises a question: How many construction jobs would there be in a healthy U.S. economy? And, by implication, how many of those lost construction jobs aren't coming back?
At the risk of putting too fine a point on it, we called an economist — Heidi Shierholz, of the Economic Policy Institute — who helped us come up with a number: In a healthy economy, we'd have about 6.5 million construction jobs.
That's a million fewer construction jobs than we had at the peak of the bubble — and a million more than we have today.
Numbers in millions
Here's how we came up with the number.
We went back to January of 1997, just before the start of the long real estate boom/bubble. (You can clearly see the timing in this graph.) At that time, construction jobs accounted for 5.6 percent of all private sector jobs in the country.
So we took 5.6 percent as reasonable share of construction jobs in the U.S. in the absence of a real estate boom or bust. And we multiplied it by the total number of private sector jobs in the U.S. in December, 2007, just before the start of the most recent recession.
The result is 6.5 million construction jobs.
This is, of course, just a rough, back-of-the-envelope way of thinking about it. Still, the broad outlines are useful. It tells us that lots of construction jobs are likely to return as the economy gets back to normal.
By the same token, it also shows that about half of the construction jobs that disappeared aren't coming back for the foreseeable future.