Economic recovery from the 2020 recession is currently out of reach. But unlike the recovery from the 2008 recession, when jobs were scarce, today’s recovery is upside down, driven by Great resignation workers who are fed up with poor working conditions and ready to demand change.
The number of workers leaving their jobs continues to rise in 2021. September 2021 saw the highest number on record, with 4.4 million workers quitting across the country in that month alone. For the prospect, it was 4.3 million a month earlier and 3.3 million a year earlier, according to the Bureau of Labor Statistics (BLS).
In general, workers are less likely to quit during periods of employment. economic distress, such as during a recession or during the period of immediate recovery from a recession. This is because they are less certain of their ability to find a new job and are therefore more likely to stay even when poor working conditions leave them dissatisfied with their job.
In 2021, even with the 2020 recession Still fresh in our minds and with the effects still wreaking havoc on the supply chain and inflationary measures, many employers are struggling to find workers to fill vacancies. They offer signing bonuses, above minimum wages and other perks. With 10.4 million Jobs in September 2021, it’s no wonder that the 4.4 million workers who quit this month are confident in their ability to find another job. For reference, before the pandemic, the highest number of job openings in the United States was 7.6 million openings, according to the New York Times.
Why are workers quitting en masse and why job vacancies persist? There are a number of factors that lead workers to demand more from their workplace, including:
- persistent difficulty in finding childcare as unpredictable school closings persist during the pandemic;
- the decision of the elderly, sometimes immunocompromised, at risk of take early retirement and leave the labor market for good;
- the ability to grow savings during the pandemic as a result of multiple rounds of individual investigations stimulus payments, allowing workers the luxury of being more precise and waiting for the right job; and
- The growth desperation of employers, forcing them to offer more generous wages and benefits to new workers, causing many to quit their old, lower-paying jobs.
The real estate disaster of low labor market participation
Here in California, just over a million jobs were still lacking in the labor market as of September 2021. However, there are around 650,000 active job vacancies, according to the state’s employment development department.
For real estate, the labor shortage has hit construction particularly hard. Even before the pandemic disrupted everyone’s lives, the shortage of construction workers caused delays and higher costs for builders. Now in addition to shortage of building materials, the lack of manpower is even more of a brake on new construction.
Supply chain disruptions threaten California real estate market
Without more workers, construction will continue to fall below what is needed to meet demand, exacerbating the inventory shortage that has skyrocketed home prices out of reach for most first-time buyers. House. In addition, insufficient construction has also caused rents to rise faster than wages, worsening living standards and contributing to the worsening homelessness crisis in California.
Apart from our continued housing shortage, the weak labor market participation (LFP) rate has broader economic implications. A low LFP rate is a sign of a weak economic base. Without a steady stream of income, households are at the mercy of their savings, which are not infinite. Eventually, workers will have to return to work, or move in with relatives and contribute less to the economy.
Many of the workers who left the workforce during the pandemic were women. Instead of earning an income, they became responsible for the care of children and elderly parents. This is problematic for the incomes of individual households, and it is also detrimental to the economy as a whole.
Since the 1970s, when women began to work in greater numbers outside the home, household income has continued to climb. In real terms, household income increased 21% from 1979 to 2018, according to Brookings. As women make up a disproportionate share of workers now unemployed in 2021, expect to see measures of household income – and economic participation – decline.
Real estate professionals: how do you see the Great Resignation unfolding in your careers? Are more of your clients quitting their jobs? Or are your colleagues pursuing other careers outside of real estate? Share your experience with other readers in the comments below.
The participation rate is rebounding slowly, with little implications for real estate