The United States is mired in an urgent jobs crisis. Despite some early signs of a sustained economic recovery, in many parts of the country the debilitating fallout from the Great Recession on employment remains a painful fact of daily life. Few industries have felt the economic downturn harder than the construction industry, which suffered the most from the consequences of a decade of gross mismanagement of our nation’s mortgage markets and financial services industries.
The unemployment rate in the construction industry hovers at Depression-era levels, remaining near 25% for three straight months by March of this year. Between 2006 and early 2010, total payroll employment in construction fell by 2.1 million jobs, with residential construction declining by 38%, meaning that more than one in three construction workers lost their job as a result of this recession. And this collapse in construction cascades across other industries as well. Construction-related retail jobs fell by 14%, and manufacturing jobs in wood products by 30% over the same period.
Collapsing demand for labor in construction industries is devastating to American families and communities nationwide. To confront this crisis, the U.S. jobs market needs sustained new demand for the skills of construction workers that is grounded in providing real value to the economy through enhanced productivity, greater efficiency, and improved asset value for real estate. For that to happen, we need a sound strategy for investment in our nation’s stock of residential and commercial buildings — a strategy that will get banks lending again, put construction crews back on the job, and improve the long-term economic value of buildings for homeowners, businesses, and investors alike.
Such a solution is readily available. Our country needs a national program to retrofit America’s homes, offices, and factories for energy efficiency — a program that can provide an important answer to the jobs crisis facing our country. But it will take public policy leadership to mobilize the private sector investment that is needed to grow this emerging market. Fortunately, many states around the country are already demonstrating that with public sector leadership it is possible to jumpstart market demand for energy efficiency retrofits of our homes and businesses.
In this paper, the Center for American Progress and Energy Resource Management look at state regulations and incentives for energy efficiency that are working today in leading states to accelerate demand for energy efficiency services, businesses, and ultimately jobs. As this market rapidly grows in coming years, states that have put in place strong policies for energy efficiency will be best positioned to capture these new employment opportunities for construction workers in clean energy. Despite the growing state leadership documented here, however, more must be done to capture the full potential of energy efficiency to serve as a national engine of reinvestment and job creation.