Democratic and Republican Party candidates for President have adopted versions of “filter down” economics as vague solutions to what is now a catastrophe. Two generations of highly educated construction professionals have been wiped out financially. Another is graduating from college to find almost no job openings. Meanwhile, politicians of both parties are denying their culpability for the multiple human tragedies that their actions and inactions have caused. Smearing makeup on freckles will do nothing to heal a stab wound to the heart.
ATLANTA, GA -- Like generations of aspiring architects and civil engineers before them, students at the Georgia Institute of Technology look out the windows of their dorm rooms to the dramatic skyline of Downtown Atlanta. However, unlike all students before them, going back twelve decades, they will see no construction. Private sector construction came to a sudden halt in the Atlanta Area in 2007. In 2008 state and local governments canceled projects because of the stark drop in tax revenue. By late 2008 prominent Atlanta architecture firms were going bankrupt. Some had survived the Great Depression, but were put permanently of business by the lack of projects to pay rent and payroll.
The situation in many former boom cities like Atlanta is not likely to change soon. According to the national real estate research firm of Jones-Lang-LaSalle, Downtown Atlanta currently has a 22.5% vacancy rate and slim chances of new construction in the foreseeable future.
The forebears of these Georgia Tech students dreamed of following the paths of brilliant design professionals in Atlanta such Structural Engineer T. Z. Chastain or Architect John Portman. This generation can only ponder ways of surviving after graduation, until perhaps some day there is a job opening for an internship in their profession. Like most of their counterparts around the nation, though, that day is not likely to happen. They are a lost generation without dreams.
Those young men and women around the nation, who have chosen career paths in engineering and architecture, are the cream of America’s educational systems. Their high school grades and SAT scores would assure acceptance to virtually any institution of higher learning in North America. They are the future of technology in the United States. They are the creators who can make life better for all. Nevertheless, as will be seen in a subsequent discussion of candidate positions, the primary concerns of both political parties focus on financial institutions, personal values and stimulation of export-oriented industries. The loss of human potential for those not shuffling money, does not appear to be a political issue.
Three decades of change
The design professions are unique in that while their titles require state licensing, exceptional education and continually expanding professional skills, they must also produce physical products like factory workers. This has led to them being increasingly viewed by corporate management, financiers and attorneys as commodities.
Typical entrance standards for most university architecture programs are being in the upper 5% of a high school class and 1150 on the SAT. Most states require that architects successfully graduate from six years of rigorous education, plus complete three years of structured internship and pass a 48 hour long national exam. Of the 187 students in this architect’s freshman class, 18 graduated and eight eventually became licensed architects. Only three are actively calling themselves an architect now.
Two generations of architects and civil engineers have lost their financial assets, offices, equipment and trained employees due to the never-ending mega-recession. In far too many cases, desperate firm owners took out personal loans to pay employees. Banks sent deputies to seize the personal belongings in their homes along with the contents of offices, when these loans defaulted. Most items seized by banks were either auctioned off a minute fraction or their value or dumped into public land fills. The banks wrote off the depreciated value of seized personal items as tax losses, while those whose homes were foreclosed on, owed additional income taxes for the difference between their home value and the foreclosed loan.
Despite the optimistic view of national politicians to the contrary, one can not push a button on an assembly line when the economy gets better, to mass-produce new baby architects and engineers. Experienced professionals have been stripped bare of the financial and technological assets needed to restart new offices. Wal-Mart can not legally go into the architecture and engineering business. Young graduates must work under the supervision of experienced professionals at least three years to be licensed. Creation of an architecture or engineering office is not in the same genre as investing in a restaurant or automobile dealership.
Architects, civil engineers, landscape architects, site planners and surveyors create construction drawings and written specifications to describe a construction project. These are called professional services, but in the public’s mind, they are products. When hand drawing and typewriters were required for these products, they were very labor intensive. Even the plans for a house might take two months to complete. With the advent of computer-based drawing technology (CADD) in the late 1980s, the productivity of architects has increased approximately 500%, according to the American Institute of Architects (AIA.)
There has been an improvement in the salaries of architects since 1990 according to AIA, because of the improved productivity. In 1990 the median salary of architects was $34,000. In 2011 it was $73,000. However, these statistics are misleading. If architects had been rewarded by a “free market economy” for increased productivity, their median salaries would have been $170,000 by 2012. If architects had merely been compensated for 175% inflation since 1990, their median salary would have been $59,160. Even this median salary figure is highly misleading because it includes architects in government, who make much more on average than those architects actually producing architecture. The majority of private sector architects have little or no work. They can not afford AIA membership and are not being surveyed.
From a person perspective, here is the reality of the American economy that national politicians seem to be ignoring. All of the realtors, commercial developers, structural engineers, mechanical engineers, landscape architects and surveyors that this architect has done business with in the past 22 years are no longer in business!
Democrats try to shift focus to the big picture
A few weeks before the State of the Union Address the White House sent out a questionnaire to those in the media, who focus on specific aspects of the economy. The recipients were asked to specify their primary areas of concern and make recommendations for policy changes. They were also promised that all recommendations would be read by the staff.
That promise obviously was not kept. The White House was sent specific statistics by this columnist on the actual state of the economy in the Southeast, and the virtual extinction of construction professionals. It was pointed out that architects and civil engineers had disproportionately suffered from the failure of the federal government to enforce the laws governing banks, financiers and attorneys, yet these same elements of the economy were the primary beneficiaries of the Obama Administration’s federal assistance.
Foreclosure attorneys are still being paid exorbitant commissions drawn from federal funds awarded to Fannie MAE. The federal government has spent over $1 trillion to subsidize Fannie MAE and Freddie MAC during the recession. In most foreclosures of lower and middle income homes, the commissions paid to the foreclosure attorneys greatly exceed the amount of past due loan payments owed by the now homeless owners.
The White House eventually emailed back a mass-distributed glorification of the State of the Union Address to those who participated in the survey. The press release describes a solution to the current economic swamp which is based on creating new export-based industries in the United States and establishing higher ethics on Wall Street. It was addressed to “Dear Friend” and does not mention the word construction, architect or engineer. The White House ignored the proof that this administration is subsidizing foreclosures, while doing little to help distressed homeowners. President Obama apparently does not have an immediate solution to the holocaust within the construction industry, and therefore does not want to discuss the issue.
Republicans try to shift blame away from Bush Administration
While the presumed Democratic candidate for President seeks to draw attention away from specific issues, Republicans blame Obama for the economic collapse that occurred during the last two years of the Bush Administration. With the exception of Ron Paul, the candidates’ solutions to the economic crisis are a return to the policies of the Bush Administration, which created the crisis. Few candidates have been quoted making specific comments about the construction industry.
Newt Gingrich spoke to an association of general contractors in Miami on January 21, 2012. He did not present any specific ideas to help construction professionals. Gingrich promised to go back to the supply-side “playbook” again if elected president, by lowering taxes on corporations and gutting the federal bureaucracy. Among his proposals was the elimination of the Environmental Protection Agency. He called it a “dictatorial job-killing agency.” Prior to running for congress, Gingrich was an environmental science professor at West Georgia University in Carrollton, GA.
Ron Paul did not offer a specific solution to the situation with architects and engineers in a February 1, 2012 public statement, but he is the only candidate who admits that a long term catastrophe has occurred in the construction industry. He wrote, “These people invested time and money in training and spent years establishing careers in real estate, mortgage lending, construction and contracting, careers that all vanished into thin air with the burst of the bubble.” Paul blames the recession on the over-stimulation of the economy by the federal government, but does not mention that it occurred during a Republican administration. He wants to reduce the federal budget by returning our troops back home and eliminating overseas naval bases.
Rick Santorum has not published any specific solution for the construction jobs. His overall solution to the economy involves elimination of public unions, elimination of union shops, reducing the minimum wage, and eliminating environmental regulations.
Mitt Romney has not announced any specific solutions for the construction industry and, like President Obama, tends to remain on broad issues, rather than discuss specific ideas. Romney issued 59 proposals for improving the economy in September of 2011. The document presents its strategy as being one to accelerate economic growth in the nation. The proposals primarily involve reducing the tax “burden” of the wealthiest taxpayers, reducing regulations, eliminating regulation of Wall Street investors and eliminating taxation of “at risk” investments into projects that produce jobs.
The current situation
What is most noticeable among all the leading candidates for the office of president are detachments in varying degrees from the realities faced by the American Middle Class. They all live affluent lifestyles that have been completely immune from the devastation of the recession. They are surrounded (and primarily financed) by persons who benefited the most from the past federal policies and financial industry corruption. Most have almost free healthcare provided to them as government officials, while simultaneously raging at the threat of the Middle Class getting government assisted healthcare. While publically proposing their own concept of change, at heart is an incentive to maintain the status quo . . . to keep those hogs slopping at the trough.
In contrast, design professionals such as the hard working students at Georgia Tech, themselves made a “contract with America.” They chose to assault difficult academic programs with the anticipation of being proportionately rewarded by our nation’s economic system. As professionals, they continued to work hard, producing real products that improved the quality of life of their communities. Then one day, they woke up to discover that because money handlers had been slopping at the nation’s economic trough, all that hard work would be rewarded by being homeless and unemployed. That is a very different perspective.
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