In the haze of Los Angeles it was impossible to feel the sunshine of optimism that emanated from the 2012 AIA Convention in Washington DC. I should have been there because, as you have probably noticed, I could use a dose of that sunshine. I have not been able to conjure any feelings of optimism since 2008. It’s not that I am morally or ethically opposed to optimism. I just require valid evidence for having it. Perhaps I am simply one of those unhappy individuals who tend to view optimism with suspicion. In the face of real problems, mere optimism somehow seems too simplistic.
The ABI Problem Once again, the ABI is down and continues to hover at or near poor performance. Any minute up-tick is a cause célèbre that sends shudders of glee throughout the architectural press—similar to how NPR plays the opening bars of “We’re in the Money” on the “good” days when the DOW is up ten points. And, by the way, this tune was written during the Great Depression. The ABI’s gradual trend upward has been excruciatingly drawn-out and consistently below expectations. We need to see a sustained rise of the ABI above 50 for many months before any trumpets can start blaring. Additionally, the Dodge Index, which measures construction starts, is equally problematic. It’s most recent advance of 11 points was largely due to construction on nuclear power plants in Georgia and South Carolina. The Unemployment Problem According to Architectural Record’s Jenna McKnight, AIA Chief Economist, Kermit Baker, “revealed that approximately 60,000 (!!) payroll jobs have been eliminated at U.S. architecture firms since the recession began in December of 2007.” This comprises “28 percent of the pre-recession workforce at firms,” she continued. Of those, 36,000 were architects. Even assuming these numbers are conservative, they still paint a bleak picture of the recession’s toll on the profession. Mr. Baker stated that the numbers are derived from US Department of Labor statistics. 60K is the difference between the peak of pre-recession employment and the recent low point. “The 36K represents employees directly engaged in architectural services,” he says. This breakdown is based on the AIA’s own economic survey that includes data from 4-5 thousand firms across the country. The unemployment problem is also compounded by the fact that there is not enough growth momentum in architecture to re-absorb those 60,000 (or however many) eliminated jobs. Meanwhile, thousands of new “interns” are released from architecture schools every year. Most of these “recession graduates” are not going to be as “lucky” as the one individual who got hired at the convention by successfully networking. Moreover, new hires are typically brought on at recession-adjusted salaries. Bleaker yet, as cited in The New York Times (a less-than-optimistic publication), a new analysis by the economic forecasting firm IHS Global Insight shows that many states will not recover their pre-recession employment levels until 2015 or later. If architecture begins to recover before then, it will most likely do so without picking up the people it shed in the recession. The Eurozone Problem The Eurozone is on the brink of collapse over differences between austerity and stimulus policies. This, in fact, topped the agenda at the Camp David G8 summit. If the Euro falls apart it will drag the US further down. Note: optimists assert the Euro will never collapse and that there is nothing to worry about.
The Banking Problem The losses at JP Morgan Chase turned out to be worse than anyone imagined: $6 billion. According to economist, Robert Reich, this could signal another taxpayer-funded bailout. Naturally, this creates more uncertainty in markets that have already been unstable for the last four years. In addition, the lending arms of the banking sector have been so focused on internal damage control that they have made it almost impossible to get money flowing again. The “Race to the Bottom” Problem For four years architects have engaged in a “race to the bottom” by pushing fees to unsustainably low levels. How long will it take to force fees back up to pre-recession levels? How will architecture even “catch up” once inflation is factored in? It will demand a sustained, coordinated effort by architects and the AIA to correct the damage this “race to the bottom” has caused. The China Problem China, one of the strongest markets for architecture, has been cooling its economic jets and going through leadership transitions. A dynamic market that once seemed predictable because of its centralized economic controls, is more and more revealing new unknowns and systemic weaknesses that threaten the stability of firms doing business there. As a result, China can no longer be relied upon to “float” architecture out of the recession. Conclusion Pessimism is not the solution to this over-privileging of optimism. An emotional crutch of this sort would be just as bad and equally an expression of powerlessness. Because the heart of the problem, the real heart of darkness, is that architecture is powerless in the context of larger economic forces. With everyone cautious about spending millions of dollars on buildings, all architecture can do is continue to convince itself and the world at large that it is relevant and has something valuable to offer. It most certainly does, but only when people can afford it or are willing to accept a certain level of economic risk. Architecture, even public interest architecture, is at the mercy of capital flows beyond any single profession’s control. So this is where architecture is today. Simultaneously, it is also the medal-winners who helped shape the renewed vision of Lower Manhattan. It is the hope that our built environments can be inspiring and transformative. It is the child who dreams of becoming an architect. But architecture, like the economy as a whole, is in the midst of a crisis that seems far from over. We can’t simply trust an ideology of optimism to see our way to a better future. Obama’s first term is evidence of this. It’s still about hope. But hope has to be backed up by decisions and strategies for the real world. In this sense, perhaps more of the convention should have been turned over to issues of job creation and economic sustainability rather than once again just telling the world how great we architects are.