Most conversations about the beleaguered housing sector focus quickly on one topic, prices. As in, "Will they ever stop falling?"
We almost never talk about the 48,000 construction jobs Minnesota lost during the last five years.
Maybe 2012 is the year that home values finally stabilize. But those construction jobs? Most of them -- probably much more than half -- may never come back. They were casualties of a burst bubble, much like all those dot-com marketing jobs that evaporated in the wake of the tech stock crash in 2000.
This may sound unnecessarily gloomy, until you consider that the forces that turbocharged and temporarily distorted home prices worked a similarly destructive magic on labor markets as well.
Between 1997 and 2007, the United States added an unprecedented 2.1 million construction jobs. Some were in commercial construction as developers scrambled to erect grocery stores, drugstores and bank branches close to all those new subdivisions. But the 50 percent surge in new home construction indicates that the vast majority of those new construction jobs were related to housing, and many economists credited the growth in construction jobs for helping blunt concurrent losses in the manufacturing sector.
To put those numbers in context, in most years only one in every 20 Americans works in construction; but between 1997 and 2007, one in every seven new jobs was a construction job.
So it was in Minnesota, where construction employment peaked in February 2006 at 132,000, a gain of more than 40,000 jobs from the beginning of 1997.
When the money spigot closed and new home construction plunged to all-time lows, America suddenly found itself with too many builders, remodelers, carpenters, plumbers and tile installers. In Minnesota, construction accounts for 30 percent of the jobs lost since the recession began, and many economists now say it partly explains the historically high unemployment rate for young men without a college degree.
