Where did all the workers go? The great resignation arrives in California

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The 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, fueled by that Big resignation by workers who are fed up with poor working conditions and ready to demand change.

The number of workers quitting their jobs will continue to rise in 2021. September 2021 saw the highest number ever, with 4.4 million workers quitting nationwide in that single month. In perspective, this was an increase from 4.3 million a month earlier and 3.3 million a year earlier, according to the Labor Statistics Office (BLS).

As a rule, employees quit less often during periods of economic hardship, for example during a recession or during the immediate recovery phase after a recession. This is because they are less sure of finding a new job and are more likely to stay, even if poor working conditions make them dissatisfied with their work.

2021, also with the Recession 2020 Fresh on our minds and the impact that is still having devastating effects on the supply chain and inflation metrics, many employers are struggling to find workers to fill vacancies. They offer signing bonuses, inflated minimum wages, and other perks. With 10.4 million Job offers In September 2021, it’s no wonder the 4.4 million workers who quit this month were confident of finding another job. For reference, prior to the pandemic, the highest number of job openings in the U.S. was 7.6 million, according to the New York Times.

Why do workers quit in droves and why do vacancies persist? A number of factors push workers to demand more from their jobs, including:

  • the persistent difficulty of finding childcare as unpredictable school closings continue during the pandemic;
  • the decision of older, sometimes immunocompromised, endangered people, retire early and leave the workforce permanently;
  • the ability to generate savings after multiple rounds of individuals during the pandemic Incentive paymentsthat gives workers the luxury of being more individual and waiting for the right job; and
  • The growth Despair of employerswhich led them to offer new workers more generous wages and benefits, leading many to quit their old, lower-paying jobs.

The construction disaster of the low labor force participation

Here in California, just over a million jobs are still missing on the labor market in September 2021. However, according to the state, there are around 650,000 active job offers Employment Development Department.

The labor shortage has struck real estate construction particularly hard. Even before the pandemic turned everyone’s lives upside down, the shortage of construction workers caused delays and higher costs for builders. Now on top of that Shortage of building materials, the labor shortage has also slowed the new building.

Related article:

Supply chain disruptions threaten California’s housing market

Without more labor, construction will continue to fall below what it needs to meet demand, exacerbating the inventory shortage that has caused home prices to skyrocket for most first-time home buyers. In addition, the inadequate construction activity has also caused rents to rise faster than wages, which has lowered the quality of living standards and contributed to the exacerbation of the homeless crisis in California.

Outside of our ongoing housing shortage, the low is Employment participation (LFP) The interest rate has far-reaching economic effects. A low LFP rate is a sign of a poor economic base. Without a steady stream of income, households are at the mercy of their savings, which are not infinite. At some point the workers have to go back 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 generating income, they took on the care of children and older relatives. This is problematic for individual household incomes and also harms the economy as a whole.

Since the 1970s, when women increasingly began to work outside the home, Household income has increased continuously. In real terms, household income rose by 21% between 1979 and 2018 Brookings. With women making up a disproportionate share of the now unemployed workers in 2021, a decline in household income measures – and economic participation – can be expected.

Real estate professionals: How do you see the great resignation in your career? Are more of your customers quitting their jobs? Or do colleagues pursue other careers outside of the real estate industry? Share your experience with fellow readers in the comments section below.

Related article:

The employment rate is slowly recovering, with a bad impact on real estate


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