With Record Rates of Resignation, Expect More Delays on New Housing
The Great Resignation — the name given to the enormous wave of workers quitting their jobs over the past year — is making headlines nationwide around 33 million Americans have quit their jobs since the spring of 2021.
The largest spike in resignations came in September 2021, when 4.4 million workers quit their jobs, up from 4.3 million in August.
Why Are Americans Leaving Their Jobs?
There are a variety of factors pushing workers to walk away:
- For workers who are parents, childcare can be hard to find and expensive. It’s been difficult for parents to find childcare, as unpredictable school closings persist during the pandemic.
- Generational workers are impacting employment numbers. Older, sometimes immunocompromised folks face a higher risk regarding COVID-19, which has pushed many of these individuals to retire early and permanently leave the workforce.
- Saving money continues to be a struggle, particularly for employees making minimum wage. On average, Americans with incomes in the bottom 60% received $3,450 from stimulus payments. Some workers were able to allocate this money to savings, allowing them the luxury of being more particular about their employment. That could mean using the money to leave jobs that were unfulfilling or undervaluing their skill sets.
- Leverage is the biggest factor. The growing desperation of employers has caused them to offer more generous wages and benefits to new workers, prompting many to quit their previous lower-paying jobs in favor of something better.
As the number of workers quitting continues to rise, so does the number of job opportunities. A more fitting name for this Great Resignation would be the Great Renegotiation as employers will need to step up and compete for workers.
“It is a sign of health that there are many companies that are looking for workers — that’s a great sign,” said Ben Ayers, senior economist at Nationwide, in an interview with The Washington Post. “The downside is there are many workers that won’t come back in. And long term you can’t sustain a labor market that’s as tight as it is right now.”
How Is the Great Resignation Impacting Texas’s Real Estate Market?
In Texas, the resignation rate is 3.0%, which is on par with the national average.
While not directly related to real estate, the impact of Texans leaving their jobs will have a ripple effect that extends into our industry. The labor shortage has hit construction hard, causing lags in residential and commercial construction, which was already experiencing delays during the peak of the pandemic.
This labor shortage has hindered the construction, which will aggravate supply shortages, existing delays, and increased costs associated with residential and commercial construction. The price for construction resources related to residential real estate rose by 14.5% throughout 2021.
Without workers, delays in home construction will continue to rise, which will affect housing inventory that’s already well below the demand in the state. Naturally, a lack of housing will cause home prices to rise, which hasn’t been a concern in Texas historically, but home values have increased by 21.6% from February 2021 to February 2022.
How Is the Great Resignation Impacting Texas?
According to the U.S. Bureau of Labor Statistics, the unemployment rate in Texas was 5.0% in December 2021, boasting 807,000 job openings with 0.99 unemployed persons per job opening. In September 2021, Texas had the highest rate of “quitters” that surged quickly into October as an estimated 455,000 Texans left their jobs.
The supersector (trade, transportation, and utility sector) employs 2.4 million Texans or about 20% of total nonfarm employment. Nationally, this sector was third highest in quit rate at 3.6%.
A graph below illustrates the quit rate by industry for November 2021:
The Great Resignation comes at a pivotal time as businesses scramble to regain the revenue they lost during the COVID-19 pandemic. Americans are beginning to spend on services again and traveling more outside of their home states.
However, it’s not all bad news, particularly for the Lone Star State. Texas has a remarkably stable economy that’s shown its resilience before.
“So, when you'll hear this number of people quitting, it's usually voluntary quits, and it's usually people going from one job to another just because there's so much opportunity [in Texas]," said Jay Denton, Chief Labor Market Analyst with Labor IQ by Think Why, in an interview.
Denton’s outlook is optimistic, and he shared that the job market in Dallas is so hot that often new employees will accept another job offer before finishing an onboarding program.
The CE Shop readers: How do you see the Great Resignation impacting your careers? Have any of your clients (current or previous) quit their jobs? Are agents within your sphere quitting in pursuit of other opportunities? Let us know in the comments below!