According to Richard Berner, who wrote in Morgan Stanley's latest Global Economic Forum in February 2008, commercial construction is recession’s next victim. The construction industry has indeed proved to be under pressure due to the effects of the recession. Employment has been falling ever since it began. Since September 2006, the construction industry has been in despair; about 528,000 construction jobs have been lost since then. Construction jobs have become hard to find, and immigrants who dreamt of raising cash for their families and lives in America are left with pinching pennies. The unemployment rate of Hispanic construction workers is a lot worse than that of non-Hispanics, with a rate of 7.3% compared to 5% for the latter. More than half of the 456,000 jobs that Hispanics lost during the year were construction jobs. While the wages of non-Hispanics did not fall, Hispanics had to bear losses which brought wages to $485, down from last year’s wages which totaled to $521.
The national unemployment rate has jumped to 5.5%, the biggest jump since 1986. Government figures state that the number of unemployed individuals grew by 861,000 in May 2008, reaching a total of 8.5 million. Both Warren Buffett and George Soros, as quoted by the blog Top Stocks of Money Central, think that the downturn will be deep and will hit the core.
June 2008 witnessed the worst tumble in 15 years in the construction industry in Orange County: a drop of 5.8% with 6,100 layoffs this year. These figures were reported by OC Register columnist Jon Lansner, who also stated that only 700 jobs were added from May to June 2008. Before this year, an addition of 1,600 jobs each month in Orange County was considered a mediocre number.
According to the PEW study, fewer and fewer workers will be migrating for construction jobs in the US owing to the declining economy. But those who have made America their country refuse to give in and return to their homeland. The study also stated that about 12% of construction jobs are performed by illegal immigrants, who also make up 5% of the workforce overall. According to a study by the Inter-American Development Bank, only 50% of Hispanic immigrants could afford to send money to their families in their homelands because of rising costs here.
Yet these immigrants refuse to budge. An immigrant who works in construction in the US earns more than $20 an hour on average, compared with about $14 a day in Michoacán, Mexico. But now, even these immigrants agree that in a decade of living and working, legally or illegally, in many cities across the United States, they have never seen the economic situation so bad.
Clara Ochoa, director of the Mexican government's National Population Council for Michoacán state, was quoted by Business Week saying that the news of the downturn was doing little to deter immigrants who view a US in recession as a construction worker’s paradise compared to places like Purechucho, Mexico. She says that the American dream is still a reality for immigrants even if the risks are high and the rewards comparatively low.
