Unemployment is very high, yet many employers are finding it extremely difficult to fill certain jobs. It is estimated that unemployment amongst the very skilled is actually rather low: We know unemployment amongst the highly educated is definitely low. In this morning’s Wall Street Journal, an article tries to establish what is causing this. Employers and economists point to several explanations. A huge problem goes back to real estate: Millions of homeowners are unable to move for a job because the real-estate collapse leaves them owing more on their homes than they are worth. The USA has been a very transient society in recent decades, and re-location for a new job was considered standard practice. With real estate very illiquid, the flexibility to re-locate for a great job with fallen home values diminishes.
“This is another reason why we believe so strongly in owning a condominium, not a co-op,” says Leonard Steinberg, managing director of Prudential Douglas Elliman and publisher of the LUXURYLETTER, a monthly report on luxury Manhattan real estate. “Most co-op’s severely limit your ability to sub-lease: condominiums will allow much more flexibility. Having the ability to rent out a property till the markets recover allows for much greater flexibility and can potentially result in avoid taking large an un-necessary losses.”
Re-location was a huge part of the real estate brokerage business: to-day, this business has dwindled dramatically.
The job market itself also has changed. During the crisis, companies slashed millions of middle-skill, middle-wage jobs. That has created a glut of people who can’t qualify for highly skilled jobs but have a hard time adjusting to low-pay, unskilled work like the food servers that Pilot Flying J seeks for its truck stops.
The difficulty finding workers limits the economy’s ability to grow. It is particularly troubling at a time when 4.3% of the labor force has been out of work for more than six months—a level much higher than after any other recession since 1948.
Our suggestion: Focus on the real estate!