Don’t overlook the value of residential construction in job creation


* All opinions expressed in this opinion piece are those of the author and not of the Thomson Reuters Foundation.

New report shows investment in housing construction creates jobs and tackles affordable housing shortages, especially in poorest countries

By Jonathan Reckford, CEO of Habitat for Humanity International

Rajasekar, who builds houses in Kancheepuram, India, left school at 10e class so that he can earn an income for his family. He started out as a mason’s helper and worked his way up. In 2019, after 15 years as an experienced mason, Rajasekar was building an average of 30 houses and small buildings a year in the plains stretching along the banks of the Palar River, employing a team of 15 masons and 45 assistants.

Rajasekar embodies the incredible, often overlooked, job creation potential of the construction industry in emerging economies, especially for the less educated parts of the workforce. A growing body of evidence indicates that investing in residential construction, in particular, brings multiple benefits to low- and middle-income countries, by creating jobs, filling massive gaps in affordable housing and, therefore, helping move towards a more equitable COVID-19. recovery.

The construction sector, led by homebuilding, employs 6-8% of the labor market, according to a new nine-country report by economists at the University of Pennsylvania, University of Southern California and the University of Washington. A closer look at the numbers reveals the solid ROI of construction in emerging market economies.

The report, commissioned by Habitat for Humanity’s Terwilliger Center for Innovation in Shelter and released on World Habitat Day, found that on average 97 jobs are created for every million dollars spent. construction output – the value of construction activity related to new and improved homes and buildings. This is significantly more than high-income countries, such as Australia where $ 1 million investment in residential construction generates 15 jobs, and the United States, where the same investment generates 22 jobs (although it does note that these jobs are better paid).

In India, the figures are particularly striking, with the construction sector creating 182 jobs for $ 1 million. Sadly, the COVID-19 pandemic has hit workers and traders like Rajasekar hard. Sudden and sweeping closures in March 2020 kept all households indoors for three weeks, causing a massive migration of workers out of cities and crippling the construction industry. The subsequent COVID-19 epidemics that swept across the country earlier this year have left families and vulnerable communities deeply devastated.

We know that low-income populations around the world have suffered the worst consequences of the pandemic. If we stick to our current trajectory, an uneven pandemic will give way to an asymmetric recovery, further harming the people and communities who need it most. We can reverse this trend. Investment in residential construction – and experienced masons like Rajasekar – have an important role to play in building a strong and fair recovery in emerging markets.

But the investment strategies of national governments and development finance institutions need to be tailored to emerging markets, where most construction workers are employed in the informal economy, outside of registered companies and largely unregulated. nor worker protection. In India, Indonesia and Uganda, it is estimated that up to 92% of the construction workforce is employed informally.

Despite this common practice in the industry, construction and masonry jobs can be highly respected and challenging, especially for experienced workers. Young masons, who usually come from poor backgrounds with limited formal education, have the potential to gain social and economic status by training with experienced workers and mastering a skill that pays off. Households in Kancheepuram – the hometown of Rajasekar – have told Habitat for Humanity staff that masons are valued in society and praised for their contributions to the community, as well as their ability to earn a meaningful salary.

For these workers, the residential construction sector is an important first step on the employment ladder towards economic stability. Policies that encourage housing construction can generate valuable employment opportunities and a more equitable recovery, especially if they are also combined with measures that advance workplace safety and training in new, resilient materials and technologies.

A public health crisis at its heart, the COVID-19 pandemic has also resulted in economic crises around the world, exacerbating long-standing inequalities, including the global housing deficit. We, as a global community, have a unique opportunity to build and maintain a consistent way forward. It is more important than ever that national governments and development finance institutions take swift action to strengthen the residential construction sector, strengthen decent work standards and worker protection, and develop healthy and healthy communities. housed.

Many other ambitious and skilled workers like Rajasekar are eager to start their businesses while building homes and communities. Let’s lead the way for them to play a key role in supporting stronger, more equitable pandemic recoveries in the places that have been hit hardest.


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