Over the weekend, I had a very interesting discussion with a friend of mine about the economy and the rising unemployment rate. This particular friend works in the financial sector, so he doesn’t have some wonderful insights about the market, money, and how all of this is effecting us in ways that we don’t even sometimes consider.
However, when he made this statement, I was a bit taken back and couldn’t wrap my head around it, but after thinking about it a little more, he might be on to something that is worth a bit of an investigation.
Real Estate Sector Jobs Are Gone
The real estate sector has a wide variety of jobs that we considered here and it makes much sense. My friend was talking about the loan officers, appraisers, assistants, secretaries, home inspectors, construction works, contractors and more that comprise this wide and deep market of workers. If you think about it, their opportunities are gone for now.
We have to come face to face with a cold reality that is upon us. The fruitful jobs of the real estate sector that has been with us over the past 10 years or so is likely gone forever and are never going to return. People often get caught up in the conversation about when things return to normal in the real estate sector, but are things really going to return to the way they were? Or were the way things were simply not what was normal?
It seems that the latter is true. The lifestyle, run up in real estate values, and expressiveness that we have come to love and expect is not the norm of the real estate market and it has given us a false sense of reality.
Lost Real Estate Jobs Are Weighing on the Economy
The idea is that these people that have been displaced in the real estate sector are the ones that are in the unemployment lines and are weighing down the economy. But this is where our thinking differs because there are a few things that make me lean towards another conclusion.
1. Most were entrepreneurs. A large percentage of these people working in the real estate sector were entrepreneurs. And as we know, entrepreneurs are not counted on the unemployment list because they are not able to claim no unemployment benefits, so they are never considered into the equation. You might be thinking that these people worked for companies, but the vast majority were independent contractors and are not on the payroll, not an employee, and therefore, do not fit into this criteria.
We do agree that there are a large number of entrepreneurs that have gone out of business and it is resulting in increased unemployment. This is one of the main factors that they unemployment numbers are so skewed because entrepreneurs are not considered in these numbers and we know there is a large number of them out there.
2. Manufacturing Jobs are gone. Across the board, manufacturing is down or gone in this country. There was a time when you could get just about any job you wanted if you were willing to work in the manufacturing sector of this country, but those days are gone. People may want to point the finger at the real estate sector and blame today’s economy on them, but this isn’t the case. For the past 20 years or more, manufacturing jobs have been seriously effected and seems to be trimmed from this country with the outsourcing of these jobs to rising third world countries for less pay and liability. This trend has not slowed in the last 5 years and there are many, many people out of work because of it. This includes the struggling auto business that has laid off its fair share of employees.
3. Struggling white collar jobs. Many of the assumptions and ideas my friend put out there about the real estate sector weighing down the jobs market makes a ton of sense, but there are is one glaring problem. The number of white collar professionals that are unemployed. We are talking about top level managers, people from the energy sector, the green sector, the technology sector, accounting, hospitality, retail, and more.
This recession or struggling job market has effected all industries and not just one in particular. So, I reject the notion that they job market is being held down by the unemployment of those in the real estate market. I am sure that the real estate market has a lot to do with the level of unemployment because when those dollars are not circulating in the economy a lot of different areas are struggling. But this recession and jobs crunch has been effective all industries and areas. Just ask the 99ers where did they come from and how many jobs do they have available and waiting for them.
Everyone is to blame here, but I don’t think the real estate industry is the only scapegoat in this jobless economy. What are your thoughts? Do you think the bulk of the unemployed are from the real estate industry?
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