There are things in your life you hear that you have a brief thought of… “Oh that’s weird” and move on with your life.
A couple of examples,
- Baked beans aren’t baked
- Dogs sweat from their tongue (panting)
But why are these things the way they are?
Let’s put those two examples on the shelf and look at the real issue today.
Where are all of the workers?
There is a slew of new Dallas residents coming into the city, but employers can’t find qualified workers to fill open positions… weird right?!
Let’s unpack this conundrum.
Before the pandemic, Texas had 64% workforce participation from workers who were willing and able to get out there and punch the clock.
That number two years later?
62%. A full 2% drop.
That’s TWICE the national average per the U.S. Bureau of Labor Statistics.
This brings us to our question…Where’s everybody going?
Even though we went into a “technical recession” during COVID-19, older workers’ retirement accounts weren’t wiped out like in the previous recessions of 2000 and 2008. The S&P 500 still had a respectable gain of 16% in 2020.
Older workers, with their 401ks still intact, worked from home during 2020 and decided that maybe these Zoom happy hours weren’t cut out for them and should just throw in the towel.
Per the U.S. Census Bureau, 3.5 million workers decided to hang it up and officially retire, citing
- Change in health of a spouse or their health
- Emotionally ready to retire
- Prepared to retire sooner than believed
But we know the real reason… It was those damn Zoom happy hours that did them in…
What else happened though? It can’t just be retirements, right?
Correct my reader. Let’s keep going…
Workers during the pandemic benefited from the forced savings of the pandemic…
At the height of the pandemic, the American savings rate was as high as 33.8% compared to the pre-pandemic number of 8.3%.
You remember right? Cooking at the house, no vacations, bread making… We saved money then!
Well, saving money means people have options and when people have options they look around at their depressing, grey cubicle and think, “What the hell am I doing here working for the MAN?”.
This freedom opened up the floodgates for new ventures…
Business license requests in Texas SKYROCKETED after the pandemic. What else do you do when you can’t go anywhere, and you have money burning in your pocket?
You scheme baby.
Texans started businesses at a record pace. Texans turned in their employee badges to go out and chase the American Dream.
No better time to re-evaluate your life than a once-in-a-lifetime event.
There is one final side effect of the pandemic…an unexpected side effect…
According to the U.S. Chamber of Commerce, U.S. mothers’ workforce participation PLUMMETED from 70% to 55% in 2020.
Similar to the total workforce participation, this number has slowly recovered but it is not close to the original pre-pandemic levels.
Why is this the case?
The pandemic ravaged daycares and many around the country closed due to little to no revenue in 2020.
The closure of daycares put a strain on the industry over the past two years. Families are now having an issue finding a daycare option for their little ones.
Going back to Econ 101, high demand and low supply means HIGH prices. Affordability is now an issue in the child care industry as well.
This has put Texan employers in a crunch. With some of their senior employees retiring, younger employees chasing their entrepreneurial dreams, and mothers taking care of their young ones the power has shifted to the worker.
Recruiters have been working overtime in Dallas to find qualified employees or poach from other employers.
Does the market regulate with the current economic conditions? We will see….
Payne Mitchell is editor of Mockingbird Local, a business-focused newsletter that covers a range of topics in Dallas business from the housing market to start-ups. The website is Mockingbirdlocal.com.