Rebuilding The Tool Belt Economy

Our guest blogger is Bracken Hendricks, a Senior Fellow with American Progress Action Fund and the founding Executive Director of the Apollo Alliance.

Yesterday President Barack Obama announced details of his proposed $6 billion energy efficiency rebate program, known as Home Star, at Savannah Technical College in Georgia. Informally known as “Cash for Caulkers,” the Home Star program would provide immediate rebates of up to $3000 to homeowners who invest in making their homes more energy efficient. President Obama described how Home Star helps Americans on several fronts:

Now, we know this will save families as much as several hundred dollars on their utilities. We know it will make our economy less dependent on fossil fuels, helping to protect the planet for future generations. But I want to emphasize that Home Star will also create business and spur hiring up and down the economy.

Construction job lossesWith unemployment in the construction industry at almost 25 percent, it is imperative that the Obama Administration implement innovative, effective programs to spur job creation in what has been termed the tool-belt recession. The tool-belt recession has a deep and far-reaching impact on communities. Construction job losses touch every state in the union and hit local economies hard, spilling over to other parts of the economy as well. Job loss in manufacturing industries tied to construction is higher than in manufacturing as a whole. Many construction related industries have shed 20 percent to 30 percent of their jobs since the recession began. Jobs in the construction sector and related industries are suffering more compared to other parts of the economy. It is time for a national response to this tool belt recession. Here are some of the numbers:

— The unemployment rate for experienced workers in construction was 24.7 percent in January 2010.

— Total construction payroll employment has dropped by 2.1 million jobs since 2006, with residential construction down by 1.3 million, or 38 percent.

— For 2009, 12.4 percent of all unemployed workers were previously employed in the construction industry.

— There have been 134,000 jobs lost (10 percent) in construction-related retail, such as building supply stores and lumber yards, since December 2007, with 186,000 lost (14 percent) since July 2006.

With demand for construction jobs at near depression levels, stimulating consumer demand for residential energy efficiency is a smart business. It creates high-paying jobs for idled construction workers, boosts sales of American-made building materials, and saves consumers money. American companies are ready to hire back crews if we can jumpstart demand for projects. Home performance contracting for energy efficiency is one bright spot on the horizon for the building trades today.

Matt Golden, CEO of home performance retrofit contractor Recurve, and co-author of our study explains:

The tool belt recession is devastating. There is an urgent need in every state of the union to generate skilled, high-paying, long-term construction and manufacturing jobs to grow our economy. But there is hope. As an employer in the hard-hit state of California, I have seen my efficiency business grow by 60 percent, even as the construction industry has lost over 35 percent of construction jobs, around me.

It’s time to launch a national Home Star program which includes incentives for homebuyers to invest in the energy efficiency of their homes, which will jumpstart demand for labor. Congress can quickly create jobs with policies to expand investment in commercial and industrial energy efficiency and financing for retrofit jobs.

Read the whole memo about taking on the tool belt recession here.