A number of California industries are facing a labor shortage as the economy reopens, and experts say the state’s housing costs are to blame.
The pandemic has had some impact on career choices.
“We’re having a little bit of a shift as we bring industries back online,” said Adam Fowler, director of research at Beacon Economics. “It’s not uncommon for folks to reflect given the nature of the shock that we’ve had to our economy, maybe go back to school, acquire a new skillset and shift careers to something that’s more important to them personally.”
However, California’s labor woes date back to before the Great Recession, and Fowler can’t see them going away any time soon.
“The challenges around labor in California are very real, and a lot of it is rooted in our housing costs,” he said on KCBS Radio’s “The State of California.”
The state legislature has been looking to increase the amount of affordable housing in California, but housing advocates and labor advocates are at odds.
The labor side has argued new units should be built with union labor, while builders say labor has been spread so thin that the pool simply isn’t available and workers would need to be brought in from elsewhere.
However, labor is only one of the many costly variables driving up housing prices in the state, said Fowler. California’s aggressive regulatory system around local zoning also contributes, as each delay in building adds to the price tag of units.
He noted that the average wage in hospitality, childcare, restaurant and other service industries leaves workers unable to make the money stretch.
“All these jobs at the end of the day need a bed, and for places like San Francisco, parts of Los Angeles County, that housing cost drives folks farther and farther away from those essential job corps,” Fowler said.
He added that until the state is able to bring more supply online and stabilize unit costs, it will be hard to end the seemingly self-perpetuating cycle.
