The go-go years of excess stemming from what seemed like never-ending growth produced a super-sized nursery full of ugly babies. When the growth stops, you’ll find out the baby’s ugly.” As one of my old mentors, Dave Ebling, always warned, “Volume covers a multitude of sins. That was a natural economic phenomenon, and a strong argument can be made that for housing prices, material cost, and labor rates alike, the mechanism had to be reset. For most trades, there was no work, and for what work existed, they struggled to work profitably as the industry went in search of the bottom for labor rates. What is now merely a spot shortage in many locations has the potential to become a genuine crisis that drives up cost, lengthens schedules, and undermines quality.įollowing our six-year housing recession, easily the worst since the Great Depression, trades left the industry in droves. The thought of returning to the office and the daily commute may seem unpalatable for many people and with surging equity markets having boosted 401k pension plans, early retirement may seem a very attractive option," they noted, adding that border closures will have curbed immigration and slower birth rates mean fewer young workers are now entering the workforce.A labor shortage is looming and the only thing more bothersome than the potential calamity itself is the industry’s unwillingness to do anything about it. "We believe there is a more permanent loss of workers driven by a large number of older workers taking early retirement. One possible explanation for this is that households have built up savings buffers and don't have any urgency to return to work, the economists note, but the problem could be more structural than that. Instead, it is a problem with the supply of workers, which is both holding back output and increasing inflation pressures in the economy." "There are more than ten million job vacancies right now spread across all sectors with a record proportion of companies raising pay to try to attract staff. In the U.S., they noted that the economy has fully regained all of the lost economic output brought about by the pandemic although "employment remains 5 million below February 2020's level." This isn't due to a lack of worker demand, however. Looking at the cyclical and more fundamental drivers of those shortages, ING's economists examined similarities and differences in labor markets across the globe. This disrupts both local and global production and supply networks, hampering economic growth and causing product and service shortages for consumers. It matters because it's exacerbating supply chain disruptions around the globe, with key industries struggling to regain momentum due to a lack of workers or raw materials. one, with many countries around the world experiencing a shortage of workers. Sectors particularly affected by workers quitting their jobs were accommodation and food services, wholesale trade and state and local government education. Labor Department's monthly Job Openings and Labor Turnover Survey, released last week, showed there were 10.4 million job openings in August whereas the number of people leaving their jobs (the so-called "quits rate") rose to 4.3 million, the highest level seen on records dating back to Dec. The latest labor data from the U.S., for example, shows that more workers are willing to walk away from their jobs or to switch employment.
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