U.S. Construction Collapse: Stimulus Act Must Have Just Been Masturbation

The collapse of construction employment on public and private projects in the United States has become so complete, that official unemployment in the construction trades has jumped to 24.7% nationwide in January, from 18.7% in October 2009. This figure itself is a considerable understatement: The large numbers of actual construction unemployed who have given up on the industry and found hamburger-flipping, nurse's assistant, or other low-wage work, are not counted as unemployed. In the Northwest, for example, where the official construction unemployment rate is over 30%, it is really close to half of all construction employment that has disappeared, and projects are still being abandoned or mothballed.

Lyndon LaRouche, the world's leading economist, commented, "The 'Stimulus Act' must have just been masturbation."

In many regions, union officials report 30% of their members are unemployed or "riding the bench." "In the previous 14 years, I had not been out of work for more than one week," says Pat O'Connor, 57, a Connecticut carpenter. With no work since July, O'Connor says, "It is a bad dream turning into a nightmare. Is construction dead? It's just horrible right now. No one expected this. It's a depression."

"Now, there is no work anywhere," says Mark Erlich, whose New England Regional Council of Carpenters represents 22,000 union members in six states.

"The largest problem is the continued lack of financing," says Jerry Rhoades, executive secretary-treasurer of the Florida Carpenters Regional Council. "Three years ago, three contractors would bid on a project. Now 90 contractors bid on a project. That is how desperate people are."

The collapsed and completely un-reorganized, unreconstructed U.S. banking system is at the center of this problem "from the inside" of the industry. But the broader policy question is the complete lack of serious Federal investment in any important infrastructure areas, despite a physical infrastructure deficit equivalent to $5-10 trillion in investments in the economy. President Obama's new budget is without serious infrastructure investments, and cuts the Army Corps of Engineers budget by 10%. And the Obama/Biden "stimulus act" has turned out to be a lot of masturbation, for all the impact it has had on collapsing construction.

In California, a project manager for Ollman's, one of the U.S. "top 400" contractors, told the New York Times, "I have not seen any pickup. It's not looking good ahead."