U.S. Labor Shortage Impacting CRE Industry, JLL Report Says
DENVER — A JLL report called “Where are all the workers?” states that the country’s current labor shortage is having a significant impact on the commercial real estate industry, resulting in higher vacancy rates, lower asking rents and greater concessions across markets.
As of January 2018, roughly 6.3 million positions remained open but unfilled in the United States—a record high, and JLL predicts it will only get worse.
“According to Manpower Group, roughly 40 percent of employers report difficulty filling jobs. And it’s not just tech or IT jobs—just try finding an electrician or a carpenter,” says Ryan Severino chief economist, JLL.
- Over the past 70 years, men’s participation rate in the workforce has fallen more than 18 percent. Men with a high school education or less are a big part of that, as many jobs they once held have been eliminated due to technology/mechanization and offshoring.
- Right now, there are 18 million U.S. women of prime age (25-54) who are not working. At least a quarter of those have at least a bachelor’s degree or higher. That’s a lot of women who could be filling open positions, but for various reasons are choosing to stay out of the market.
- The labor shortage has a significant effect on the commercial real estate market—resulting in higher vacancy rates, lower asking rents and greater concessions across markets.
- Better vocational training could also produce a better labor pool as would better reeducation and retraining for workers displaced by trade, offshoring and technical improvements.
- Any policy or workplace program that increases paid maternity/paternity leave, improves wage disparity, increases the availability of affordable childcare or offers a more flexible schedule or improves work-life balance would encourage more women to opt back in.
- Any policy that facilitates the movement of labor between regions and cities could help, as could subsidies for housing, relocation and interview costs as well as improved infrastructure that better connects outlying areas could all remedy the labor shortage.