NEW YORK (MainStreet) — Ariel Preminger spent a decade running a construction business that built entry-level homes for families in the Los Angeles area, but by the middle of 2008, Southern California’s housing market had gone bust and Preminger quickly found himself without customers, and without a job.
“At the beginning of the recession, I thought we were going through a slowdown in the housing market for a couple years and then we would rebound,” Preminger said. “But instead of a slowdown, it was a complete collapse and our business completely stopped.”
Preminger, who moved to the U.S. from Chile in 1987 to build “a better future” for himself, realized he had no choice but to change his career to protect that future. He spent much of the year after his business collapsed weighing his options, considering whether to open a business in the food industry or perhaps start a trucking company. Eventually deciding it would be better not to abandon the home construction world he knew, he opened a home painting store in 2009 instead that is already doing quite well.
Many Americans have likely had the unfortunate experience of realizing they are stuck in a dead-end job with little room for advancement. But in recent years, millions of workers like Ariel have had a different kind of awakening. It’s not the job that’s the dead end, but rather the entire profession.
Virtually every profession experienced some cut-backs during the recession, but for a handful of industries, the layoffs were much more severe. Estimates say that 8 million jobs were lost nationwide during the recession, and the majority of these were in the retail and manufacturing industries as well as construction. The number of people employed in the construction industry in particular dropped from about 7.5 million the month before the recession began to 5.6 million by the beginning of this year, and has largely stalled there. As a result, the unemployment rate in this industry peaked at 27% in February 2010 and continues to hover around the 20% line, more than twice the national average.
“I think we have entered a period of long and permanent unemployment for these industries,” said Edward E. Leamer, director of the Anderson Forecast at the University of California, Los Angeles, which provides quarterly predictions about the direction of the U.S. economy. “This is completely unprecedented.”