85.7 F
San Fernando
Wednesday, Apr 24, 2024

Construction Unemployment Continues Upward Trend

Brett Curry knows all about job cuts in the local construction industry. Right after Christmas, the state pulled the plug on the partially complete 166,000 square foot CSUN Valley Performing Arts Center. “It was devastating,” said Curry, vice president of operations for Pasadena-based C.W. Driver, general contractor on the project. “And it couldn’t have come at a worse time.” C.W. Driver was able to re-assign staff to other projects, he said. But a large percentage of the 125 workers, mostly subcontractors, lost their jobs. Construction resumed a few months later, but the delay also forced some suppliers to cut staff. Curry isn’t the only one that’s dealt with layoffs. The number of construction jobs in L.A. County decreased 13.9 percent over the past year, from 148,200 in June 2008 to 127,600 in June 2009, according to the California Employment Development Department. Employment in specialty trades is down 14.1 percent for the same period. High vacancy rates, companies struggling to obtain financing for new construction, and decreased property values are fueling the trend, according to experts. And employment opportunities in neighboring boomtowns are few and far between. “They are struggling,” said Jack Kyser, founding economist at the Kyser Center for Economic Research at the Los Angeles County Economic Development Corporation. “What you’re dealing with is an industry that’s (virtually) dead in the water.” In past downturns, many construction workers left the state to find work in construction hotbeds like Phoenix and Las Vegas. But that’s not as much of an option in this economy, said Kyser, because those markets got hit equally as hard, or worse, than California. Anecdotally, the number of immigrant workers coming into L.A. County for construction work has slowed, he said, adding some of these workers may even be returning to their countries of origin. And accessing unemployment insurance is a problem for workers that are considered independent contractors and not eligible for coverage. In a downturn, jobseekers come in tiers, said Curry. The first are “C” workers, primarily laborers; then come “B” workers, those with higher levels of responsibility; and then the “A” players, who are industry veterans. “We’re well through the Cs and Bs and starting to see some of the A players,” said Curry. “If you would have shut a project down two years ago, these guys would have had a job somewhere else. But there’s not nearly the work today as even a year ago.” Losing the “brain trust” of a project is a problem many general contractors face if they have to slow down or halt construction, he adds. This refers to not being able to hire back those 15-20 people who know the development inside and out. “A construction project is not like assembly line work,” said Curry. “There’s a lot of upfront time invested into understanding the nuances of the project. If you take a foreman out, when the project starts again you have to begin from ground zero.” Kevin Andrew, chief operations officer of Sun World International LLC in Bakersfield, couldn’t be happier about the construction downturn. It’s spurring an uptick in available and quality labor for his industry: agriculture. “It’s an odd situation, because we always struggle to find workers,” said Andrew. “All of a sudden in the last 10-12 months, I have plenty of labor.” He even recently hired a former construction worker and waiter from the San Fernando Valley. The company employs thousands of workers to harvest grapes and tree fruit in Southern California. Workers earn minimum wage and incentives for every box of produce they pick over and above the quota. Most workers average $11-$13 per hour, he said. When construction is booming, it’s hard to find skilled field labor with a good work ethic. But the quality of workers has increased, said Andrew, and some that left to work in construction are filtering back in. The tables will turn though when construction picks up again, he said. There are other options on the horizon for the unemployed, said Kyser. L.A. County is receiving millions of dollars in federal stimulus funds for infrastructure upgrades. Measure R, passed by L.A. voters late last year, will also help fund billions of dollars worth of transportation upgrades. The military is planning on doing new construction at Camp Pendleton. And the Naval Air Warfare Center Weapons Division at China Lake, near Ridgecrest in Kern County, is planning on adding 1,000 civilian jobs by 2011. The latter is spending millions of dollars on construction of research centers and other buildings, according to a recent article in the L.A. Times. Surrounding communities are also investing in hospital and school building projects, new hotels and other developments to support the growth. And, there have been signs of stabilization in the housing market that could lead to an increase in new home construction, said Kyser, adding they’re forecasting a modest increase in single family home construction next year. “We’re watching to see what’s going to happen.”

Featured Articles

Related Articles