Employment Profile of Those Spending A Lot on Housing

October 7, 2008

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 taxes, 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

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