R esidential Construction Workers Across States and Congressional Districts In-Depth Analysis, October 18 2006 By Natalia Siniavskaia Ph.D. Newly released data from the American Community Survey (ACS) conducted by the US Census Bureau shows that more than 10.5 million people worked in construction in 2005. NAHB estimates that out of this total more than 4.8 million worked in residential construction, accounting for 3.5% of the US employed civilian labor force. This article analyzes the new ACS employment data, combines it with the recent data from the Quarterly Census of Employment Statistics (QCEW) by the US Bureau of Labor Statistics (BLS) and presents new NAHB estimates of residential construction (RC) employment by state and Congressional district. Congressional district estimates are particularly useful to highlight the importance of home building to voting constituency residing in the district. Often the political power of the industry cannot be fully captured by the number of homes being built and remodeled in a particular district due to the size, shape and location of districts. The new estimates show that in 2005 the average Congressional district had more than 11,000 residents working in home building, accounting for 3.5 percent of the voting constituency, and in some districts these numbers were twice and even three ti mes as high. I. Employment Data Sources. According to both the ACS and the QCEW, RC employment continued to grow in 2005. NAHB estimates of the ACS data indicate that 4.8 million people worked in residential construction in 2005. This estimate is significantly larger than the aggregate number reported by the QCEW primarily because the latter survey does not capture self-employed and other non-employer businesses. By contrast, the ACS surveys households rather than business establishments, and consequentially covers self-employed workers. This feature of the survey turns out to be particularly important for the construction industry, where the share of self-employed workers is 25 percent, much higher than a national average of 11 percent. According to the ACS, only agriculture has a higher share of self-employed, 33.7 percent. Because of this broader employment definition, the ACS employment level exceeds that of the establishment survey but counts voting constituencies and reflects the political importance of home building more accurately. The share of self-employed workers in the construction industry reported by the ACS is higher than reported by some other sources, such as the Census Bureau’s Current Population Survey (CPS). The 2005 CPS, for example, shows about 1.8 million out of 11.1 workers—or 16 percent —in the overall construction industry. The reason for the difference between the CPS and the ACS is not obvious; however, the CPS isn’t a large enough survey to provide the level of geographic detail available in the ACS. The ACS is currently the largest household survey in the US, covering about 3 million addresses. Owing to its wide coverage of households, information is available for all congressional districts and inclusion of self-employed workers, the new figures of RC employment reported here are based on the ACS data. The dr awback of the ACS is its limited industry information, particularly, it does not differentiate between residential and non-residential construction. To enrich these data with detailed industry information, NAHB uses the QCEW to estimate the share of residential construction for each state [1]. The resultant RC employment estimates are presented in Table 1 for all states and in Table 2 for all congressional districts. Because they are founded on a household survey, the figures should be interpreted as showing how many residential construction workers reside in each state a nd Congressional district. II . State Residential Construction Employment. Not surprisingly, most populous California has most residential construction workers. It tops the state list with more than 747 thousand workers that account for 4.7 percent of the state employed labor force. Florida is second on the list with more than 490 thousand residents working in residential construction, but they account for 6.2 percent of the employed labor force, the highest share among all 50 states. Nevada, Idaho and Arizona come close in the RC share of the state employed labor force with 6.1, 5.8 and 5.6 percent, respectively. These high shares are even more remarkable, considering that the national average is 3.5 percent. Colorado follows the leaders at a distance with 4.9 percent of its employed labor force working in residential construction. The other states on the top 10 list are Montana, Vermont, California, Utah, and Maine. At the other end of the spectrum is the District of Columbia where the share of RC workers is only 1.2 percent. Also at the bottom of the list are Louisiana and Mississippi with only 1.8 percent of their employed labor force working in residential construction, a share that is significantly lower than a national average of 3.5 percent. It is worth mentioning that the list of top 10 states with the highest shares of RC workers contains states with both extremely high and extremely low portions of self-employed construction workers. Nevada and Arizona, for example, have the smallest segments of self-employed, 9 and 15.5 percent respectively. According to the 2002 Economic Census, construction establishments tend to be larger than average in these states. While there are on average 10.1 employees per construction establishment in the U.S. as a whole, there are 13.5 employees per establishment in Arizona, and 19.2 in Nevada. At the other extreme are Vermont and Maine, where more than 41 percent of construction workers are self-employed, far exceeding the national av erage.
III. Residential Construction Workers in Congressional Districts
The average Congressional district has more than 11,000 residents working in residential construction. Figure 1 shows that the distribution of districts in terms of RC employment is positively skewed by districts with very large numbers of RC workers. For example, the highest-ranked 14th District of Florida has three times as many RC workers as the average and tops the list with more than 34,000 residents in residential construction. The second largest number, close to 32,000, is in the 4th Congressional District of Arizona. The next three high-end outlying districts are the 1st of Nevada, the 5th and the 7th districts of Florida, with 27,713, 24,852, and 23,139 RC workers, respectively. At the other end of the distribution there are several districts that contain parts of large urban areas: the 7th of Illinois that covers most of the Chicago area, the District of Columbia, and the 14th and 15th of New York located in New York City. Most residents in these urban districts tend to work in professional, scientific, and technical services. Not surprisingly, the District of Columbia also has a disproportional large share of public administration workers, while the 14th of NY and the 7th of Illinois are home to a very large group of finance and insurance workers. The 7th District of Illinois has the lowest RC employment with less than 2,500 residents working in the industry. The ranking of Congressional districts in terms of RC share of civilian employed labor force, to a certain extent, follows that of states. Out of the top 30 Congressional districts fifteen are in Florida, and eight are in California. Two out of three Congressional districts in Nevada and two Arizona districts also make the top 30 list. The district with the highest share of RC workers is the 4th District of Arizona that encompasses Phoenix and some of its suburbs. As part of the booming Phoenix-Mesa-Scottsdale Metropolitan Statistical Area (MSA) where the annual number of building permits increased from 34,200 in 2000 to 61,000 in 2005, the district went through a surge in home building. As of 2005, one out of nine civilian employed residents in the district worked in residential construction. Source: U.S. Census Bureau The 14th Congressional District of Florida comes in close second with more than ten percent of its employed labor force working in RC. The district overlaps with the fast-growing Cape Coral-Fort Myers Metropolitan Statistical Area where the annual number of building permits more than quadrupled from 2000 to 2005. Source: U.S. Census Bureau
Next on the list is the 1st Congressional District of Nevada that encompasses parts of the thriving Las Vegas Metropolitan Statistical Area. During the last five years of a housing boom an annual number of building permits in this area was rising on average 10 percent a year. As of 2005, one of out 13 employed residents of the 1st District worked in home building.
Source: U.S. Census Bureau
The new estimates highlight the powerful political presence of the home building industry. Most Congressional districts have at least 10,000 residential construction workers, but the average number is much higher and exceeds 11,000 workers. Every state except DC has at least one district where RC accounts for more than 2.11 percent of the civilian employed workforce highlighting the widespread political influence of the industry.
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Footnotes: [1] The QCEW aggregates data from quarterly tax reports filed by employers covered by various unemployment insurance programs, covering 98% of US payroll jobs. By design, this survey counts establishments and jobs; consequently, multiple jobholders are counted for each job. It does not capture self-employed and other non-employer businesses but provides significant industry detail for covered establishments and jobs. For example, it differentiates between residential building and various specialty trade contractors. New NAHB estimates use these data to calculate the share of RC in all construction jobs for each state. The estimates assume that, within each state, the share of construction workers who work in residential construction is the same whether they are self-employed or working as employees of a construction company. This should produce a somewhat conservative estimate, because the self-employed share in residential construction, especially remodeling, is likely to be greater than in non-residential. The 2002 Economic Census showed that in certain occupations, such as carpentry, the self-employed share is particularly high, and carpenters derive a disproportionately large share of revenues from residential construction. Also, residential construction represented more than half of construction value put in place in 2005 ($651 billion out of $1.144). This would imply that over half of construction labor goes into residential construction, unless productivity in residential construction is higher. |
.gif "Figure 4.4th District of Arizona")
.gif "Figure 5.14th Congressional District of Florida")
.gif "Figure 6.1st Congressional District of Nevada")
