So the economy is not doing very well, and many more homeowners are expected to go into foreclosure due to declining home prices, which of course has ramifications in the credit market. This downturn is also expected to hit various sectors and thereby the employment in those sectors.
One common characteristics of many of those who are foreclosing on their homes is that a significant fraction of their household income goes to housing. Below, I use data from the 2007 American Community Survey microdata, and delve into whether there is any indication that a cycle effect could be brewing with respect to the employment situation of these same homeowners who are likely highly leveraged. Specifically, I look at what industries (INDP code in ACS) employ the primary wage earners of households that are spending at least 50 percent of their household income on “selected monthly owner costs.” (For ACS geeks, OCPIP > 50) This includes items such as mortgage payments, condo fees, real estate taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. es, etc. I do not account for those unemployed or not in labor force as the purpose of this is to see what industries’ downturns (and thereby lower employment) could adversely affect the foreclosure situation most in the short-term when labor markets are highly rigid.
Fraction of Primary Wage Earners in Industry Whose Monthly Owner Costs Exceed 50% of Household Income (All Industries)
| Industry (Census) | Fraction |
| SRV-BEAUTY SALONS | 13.3% |
| RET-SEWING, NEEDLEWORK, AND PIECE GOODS STORES | 12.1% |
| SRV-NAIL SALONS AND OTHER PERSONAL CARE SERVICES | 11.1% |
| RET-GIFT, NOVELTY, AND SOUVENIR SHOPS | 11.0% |
| SRV-BARBER SHOPS | 10.9% |
| PRF-SPECIALIZED DESIGN SERVICES | 10.6% |
| MFG-APPAREL ACCESSORIES AND OTHER APPAREL | 10.4% |
| TRN-TAXI AND LIMOUSINE SERVICE | 9.8% |
| SRV-PERSONAL AND HOUSEHOLD GOODS REPAIR AND MAINTENANCE | 9.6% |
| SRV-PRIVATE HOUSEHOLDS | 9.6% |
| RET-NOT SPECIFIED TRADE | 9.5% |
| SCA-CHILD DAY CARE SERVICES | 9.4% |
| RET-JEWELRY, LUGGAGE,AND LEATHER GOODS STORES | 9.3% |
| RET-FLORISTS | 9.2% |
| MED-OFFICE OF CHIROPRACTORS | 9.1% |
| FIN-REAL ESTATE | 8.8% |
| SRV-OTHER PERSONAL SERVICES | 8.7% |
| ENT-DRINKING PLACES, ALCOHOL BEVERAGES | 8.4% |
| RET-OTHER DIRECT SELLING ESTABLISHMENTS | 8.3% |
| ENT-INDEPENDENT ARTISTS, PERFORMING ARTS, SPECTATOR SPORTS, AND RELATED INDUSTRIES | 8.3% |
Fraction of Primary Wage Earners in Industry Whose Monthly Owner Costs Exceed 50% of Household Income (Industries with at least 100,000 primary wage earners)
| Industry (Census) | Fraction |
| SRV-BEAUTY SALONS | 13.3% |
| SRV-NAIL SALONS AND OTHER PERSONAL CARE SERVICES | 11.1% |
| RET-GIFT, NOVELTY, AND SOUVENIR SHOPS | 11.0% |
| PRF-SPECIALIZED DESIGN SERVICES | 10.6% |
| TRN-TAXI AND LIMOUSINE SERVICE | 9.8% |
| SRV-PERSONAL AND HOUSEHOLD GOODS REPAIR AND MAINTENANCE | 9.6% |
| SRV-PRIVATE HOUSEHOLDS | 9.6% |
| RET-NOT SPECIFIED TRADE | 9.5% |
|
SCA-CHILD DAY CARE SERVICES |
9.4% |
| RET-JEWELRY, LUGGAGE,AND LEATHER GOODS STORES | 9.3% |
| FIN-REAL ESTATE | 8.8% |
| SRV-OTHER PERSONAL SERVICES | 8.7% |
| ENT-DRINKING PLACES, ALCOHOL BEVERAGES | 8.4% |
| RET-OTHER DIRECT SELLING ESTABLISHMENTS | 8.3% |
| ENT-INDEPENDENT ARTISTS, PERFORMING ARTS, SPECTATOR SPORTS, AND RELATED INDUSTRIES | 8.3% |
| RET-SPECIALTY FOOD STORES | 8.2% |
| PRF-LANDSCAPING SERVICES | 7.9% |
| PRF-SERVICES TO BUILDINGS AND DWELLINGS, EXCEPT CLEANING DURING AND IMMEDIATELY AFTER CONSTRUCTION | 7.8% |
| SRV-DRYCLEANING AND LAUNDRY SERVICES | 7.8% |
| RET-USED MERCHANDISE STORES | 7.2% |
Top 10 Industries by Actual Number of Primary Wage Earners in Industry Whose Monthly Owner Costs Exceed 50% of Household Income
| Industry (Census) | Number |
| CON-CONSTRUCTION, INCLUDING CLEANING OF BUILDING OR DWELLING DURING AND IMMEDIATELY AFTER CONSTRUCTION | 528,489 |
| EDU-ELEMENTARY AND SECONDARY SCHOOLS | 244,431 |
| ENT-RESTAURANTS AND OTHER FOOD SERVICES | 219,455 |
| FIN-REAL ESTATE | 170,643 |
| MED-HOSPITALS | 158,316 |
| RET-GROCERY STORES | 85,170 |
| EDU-COLLEGES AND UNIVERSITIES, INCLUDING JUNIOR COLLEGES | 75,289 |
| TRN-TRUCK TRANSPORTATION | 73,350 |
|
FIN-INSURANCE CARRIERS AND RELATED ACTIVITIES |
71,209 |
| SCA-CHILD DAY CARE SERVICES | 70,556 |