BEVERLY HILLS, CA—I keep hearing and reading that we are makinggreat progress in lowering unemployment. The Fed keeps tyingquantitative easing, with its unprecedented monetary policy, to theunemployment rate. Government leaders tell us job creation is ournumber one priority. However, as we look deeper into the data,rather than blindly looking at simple percentages, we may find thejobs are not exactly where they should be. As we explore theunemployment numbers and what they really mean, we will gaininsight into what this means for the future of the housing market,especially as it relates to multifamily.

According to recent numbers, unemployment has dropped to 7.5%.On the surface, that sounds good and as of 2014, we have createdapproximately 4 million jobs in the last five years. However, if welook more closely at the jobs that have been created, we see thenumber of part-time jobs has also increased by 4 million—the mostwe have seen in decades. Because part time jobs are included in theunemployment numbers, this means almost all jobs created were parttime. These are mainly minimum wage jobs that cannot support aliving and contribute little to overall market growth.Unfortunately, these jobs are also easy to lay off and the first tobe eliminated during difficult financial times. What does this meanfor the multifamily market?

According to a recent report from the National Low IncomeHousing Coalition, in no state can a full-time minimum wage worker,let alone a part-time worker, afford even a one-bedroom rental unitat Fair Market Rent. Combine this income problem with rents thathave increased as much as 20% in some areas, and we find thesupposed “decrease” in unemployment will do little to increasegrowth in the housing market. In short, this will have little to noeffect on the broader economy, no matter how you spin it.