Hurricanes, the Economy, and the Recovery Jobs Market

Hurricanes and Recovery Jobs

The Story of Harvey, Irma, Marie, and Frédéric

Unless you’ve spent the last 4 weeks in a medically induced coma, you certainly know something of the stories of Harvey, Irma, and Marie. As we’re writing this article, the lights are back on in Texas and in most of Florida and reconstruction activities are beginning. Our thoughts and prayers go out to those in the Philippines, with the hope that they’ll receive the resources they need for recovery.

Who the heck is Frédéric? The “F” storm for 2017 was Franklin, an over-sized tropical storm that dumped a lot of rain in Mexico in early August. Frédéric isn’t a hurricane, but an economist. Frédéric Bastiat was responsible for an economic theory that directly relates to today’s topic of jobs and hurricanes.

In the 1800’s Bastiat considered the economic implications of a window broken by a homeowner’s devilish son. Did the broken window ultimately create more economic value than cost? The same question can be asked of hurricanes. Do the benefits of recovery projects and the jobs they create outweigh the cost of the damage?

We’ll come back to Bastiat’s theories later. First, let’s look at the immediate effects and longer-term response to Harvey and Irma.

Hurricane Economics and Recovery Jobs

The three September hurricanes caused a massive amount of damage and destruction. Recovery is well underway in Texas and Florida, but most of Puerto Rico is without power as of the writing of this article. Depending on the source, the assessment of economic damage in Texas and Florida could be as low as $210 billion or well in excess of $300 billion. Those are significant sums, and the after-effects of the storms will show up in measurements of GDP and jobs over the coming months.

House DestructionThe disruption showed up immediately after Harvey, as unemployment claims increased by 62,000 the following week. It was the sharpest weekly increase since Superstorm Sandy in 2012, and claims were concentrated in the Houston area.

By all accounts, the federal government’s response to the storms that hit the US mainland has been swift and effective. The Federal Emergency Management Agency (FEMA) has led the government recovery efforts and may also lead in the creation of federal recovery jobs to partially offset the storm-related losses.

On September 8, in anticipation of damage, the US Office of Personnel Management (OPM) issued a directive authorizing Federal agencies to conduct emergency hiring in support of hurricane relief efforts in Texas and Florida.  Federal agencies were authorized “on a temporary basis for up to 1 year, to hire individuals who will be directly involved with the recovery and relief efforts associated with Hurricane Harvey or Hurricane Irma.”

FEMA’s response was immediate, with a variety of temporary federal recovery jobs posted on USAJOBs.gov  and the FEMA website. (See also our post on FEMA Jobs).  Posted positions include GIS Specialists, Insurance Specialists, Customer Service Representatives, and even temporary positions for  American Sign Language Interpreters in Austin and Houston.

The Small Business Administration (SBA) also opened a special Hurricane Response Jobs site. SBA administers the disaster loan program, which lends money to businesses, homeowners, and renters affected by natural disasters. SBA is seeking inspectors, loan specialists, call center workers, and CSRs. Temporary hurricane relief jobs are located nationwide, with many openings in Atlanta, Buffalo, and Sacramento.

There is an emphasis on temporary. While short-term government hiring may compensate somewhat for job losses in disaster-affected areas, almost all of the SBA and FEMA postings are temporary positions, not career opportunities. The OPM directive provides for possible renewals of some federal recovery jobs after a year, but the emergency hiring provisions do not signal a return to expansion of the federal government.

It’s possible that some federal agencies may add permanent positions related to reconstruction and emergency preparedness. Watch postings from EPA, U.S. Health Service, and HUD on USAJOBS in coming weeks.

NOAA Hurricane Maria Map
Will NOAA hire meteorologists to create more maps?

Private Sector Hurricane Recovery Jobs

The immediate private sector response to the hurricanes in Florida and Texas were clearly visible. Parades of power trucks and legions of entrepreneurial chainsaw operators swarmed to the disaster areas to clean up the mess. Cleanup is progressing rapidly in the disaster areas, but the work of reconstruction will take more time.

Daniel Culbertson, an economist with Indeed.com, shared some interesting data correlating searches for hurricane relief work and open positions in an interview with Fortune magazine.2 Searches for terms including “fema,” “disaster”, and “hurricane” spiked quickly after Hurricane Harvey, but openings for hurricane relief jobs have continued to climb, indicating that the demand for workers to help with recovery could outstrip supply.2

Hurricane Recovery Jobs Search Graphs

Both Florida and Texas experienced shortages of skilled construction workers before the hurricanes. Construction jobs evaporated during the recession and many in the field left for other occupations. While the construction market has steadily recovered, workers have not flocked back to the construction trades. A 2015 survey by the Associated General Contractors of America showed that an average 60% of contractors were having difficulty hiring skilled labor.3 The new administration’s immigration policies have worsened the situation, as availability of immigrant construction workers has declined.

What does this mean for you? Construction management jobs are plentiful on the major job boards and demand for skilled workers and supervisors will be strong in the near term. If you’re an engineer, architect, or manager with construction experience, hurricane reconstruction could provide career opportunities.

The Broken Window Fallacy: Hurricanes’ long-term impact on jobs and the economy

tFrédéric Bastiat and the Broken Window FallacyNow, let’s come back to Frédéric Bastiat and his question. Are the effects of broken windows and natural disasters ultimately beneficial to the economy? Do they create recovery jobs and revenues?

Appropriately enough, Bastiat called his theory the “broken window fallacy.” It starts with a simple question, “Would there be enough work for glaziers (window repairmen) without young scalawags who broke windows?” He concluded the obvious, that there would be less work and therefore less economic value that would accrue to window repairmen if young vandals were eliminated.

Bastiat then considered another implication of the cost incurred to the homeowner by the actions of his miscreant son. How could the homeowner have spent the money had the window not been broken? Could he have purchased new shoes for the kid? Counseling to adjust his tendencies toward misbehavior?

As the theory goes, replacing the window creates less value because it is a replacement purchase. There is an opportunity cost – the benefit to the window repairman is offset by the value that could have been produced by an alternate purchase. Translated into hurricane terms, reconstruction will produce some economic benefit, but it will be offset by other benefits that could have occurred if the expenditures on recovery weren’t necessary.

The Federal Reserve agrees with Bastiat’s theory. On September 20, the Fed’s Open Market Committee considered the impact of the storms and did not make additional adjustments in their policy. Their report from the meeting put it this way:

Hurricanes Harvey, Irma, and Maria have devastated many communities, inflicting severe hardship. Storm-related disruptions and rebuilding will affect economic activity in the near term, but past experience suggests that the storms are unlikely to materially alter the course of the national economy over the medium term.

The job market remains strong and the Fed expects that “economic activity will expand at a moderate pace, and labor market conditions will strengthen somewhat further.”

Ready to go replace some windows?

If you’re in the construction field and looking for a career change, repairing the damage from the September hurricanes may provide an opportunity to make a move that could benefit your career and your bank account.

If you’re in a different line of work, don’t worry too much, don’t worry too much about the negative effects of the hurricanes. Some jobs that have been lost in Houston and South Florida may not come back for a while, but the effect on the overall economy should be minimal.

It’s a good time to make a career move. The job market remains strong and near to medium-term economic projections are good. If you’re considering a career move to help with reconstruction, within the federal government, or within your industry, you’ll need a resume that’s carefully prepared to get results. CareerPro Global can provide valuable assistance with your next steps. We’ve worked with thousands of job seekers to create effective USAJOBS resumes and private sector resumes and we’d love to help you with your next steps.

Ready to get a hurricane relief job? It’s easy. Just get in touch with CareerPro Global for a free consultation.

Sources:

 1 Emergency Hiring Situation Resulting from Hurricane Harvey and Hurricane Irma, chcoc.gov, 8/27/17

2Donnelly, Grace. Hurricane Recovery Jobs Got a Ton of Interest After Harvey and Irma on Indeed, But It’s Already Declining , Fortune, 9/22/17

32015 Workforce Survey Results, ACG of America.

4Press Release: Federal Reserve issues FOMC statement, federalreserve.gov, 9/20/17

 Image Credits: US Navy, US Department of Defense, NOAA, Wikimedia Commons