Essay | Global Vision 2022

The big squeeze: global labour market demographics

By Shane Taylor


Associated Contact

Shane Taylor

Americas Head of Research

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Global labour markets have been impacted in highly uneven ways by the pandemic and thus, at the start of 2022, we find both critical skills shortages as well as still-too-high unemployment. Labour supply-demand mismatches have helped spur some of the inflationary pressures noted in Sabina’s chapter on “Five Trends in Global Demographics…”. Impacts have varied widely by geography, by sector and occupation, by gender and age cohort and other variables.

These acute, near-term, pandemic-related labour force issues have also collided with several longer-term, more chronic problems in the structure of many labour forces. Near-term and long-term implications for real assets demand are discussed as are some of the considerations for management of current stock and development of new supply.

In the final days of 2021, as this essay was being drafted, the following were just a few labour market-related issues – among many – making headlines: as part of Germany’s new coalition agreement, the country will raise the minimum wage of EUR 9.60 to EUR 12 an hour and this is estimated to boost the income of nearly 2 million workers, roughly 5% of all German workers; retired subway workers and bus drivers in New York City are being offered up to USD 35,000 as sign on bonuses to return to work in the Transit Authority; the Road Haulers Association of the UK estimates a shortage of nearly 100,000 truckdrivers in the country; in Australia, ANZ Research found job advertisements were up 7.4% month-on-month in November and were over 44% higher than the pre-pandemic number in January 2020.1 But also the headline: “South Africa Jobs Bloodbath: unemployment rate increases 2.2 percentage points to a record high of 46.6% at the end of 3Q”.2 What is going on with global labour markets?

In short, many things are affecting labour markets at the same time. On one hand, many labour force indicators rebounded rapidly through 2021, in spite of some ongoing pandemic-containment measures and lingering economic uncertainty due to Covid-19 variants. In particular, shortages of workers in a wide range of skilled and unskilled occupations have been reported and are partly to blame for some of the global supply chain bottlenecks. Indeed, these supply chain labour shortages are holding back an even stronger economic rebound. Basically, as many economies emerged from their pandemic-induced hibernation, a really strong demand for goods (and fairly decent demand for services as well) has meant that businesses, large and small, have had trouble attracting or retaining staff to service that demand. But the pandemic and its various containment measures have also served as a black swan shock which prompted many employers to shed jobs, and even where various government programmes were deployed to assist businesses, or their workers specifically, many millions of jobs have been lost and uncertainty remains over the degree to which some of these may (ever) return.

Structural challenges

Even prior to the pandemic, labour markets faced several challenges and economies were not running as well as they could have, given these frictions. Among the main issues were: the rapid aging of workforces and rising dependency ratios in many economies (Figure 1); political and other risks to the flow of labour force migration; skills shortages and skill mismatches meaning many places could not compete in the global economy nor improve local economies and living conditions. Cross cutting these challenges were: the rise of automation which both created and destroyed jobs; issues of gender, class and race given that many jobs in many locations were not evenly distributed along these categories, and an historically high level of inequality prevailing,3 in large part due to the relative negotiation weakness of workers and seemingly unrestrained expansion of wealth among the owners and upper managerial echelons of certain businesses (Figure 2) often broadly dubbed as “the 1%”. These trends had been playing out for several years prior to the pandemic, with elections delivering strong swings to populist, nationalist and localist leaders and a corresponding backlash and even hostility, to globalisation.


Source: Oxford Economics, World Bank’s World Development Indicators.
Note: The dependency ratio compares the working age population of a given country (simplified as those aged 15-65) with those who are roughly considered too young (under 15 years of age) and too old (aged over 65) to be working age and thus are deemed “dependent” on workers. In the data above we note that Japan’s dependency ratio is projected to rise to a very high level given the rapid aging of its population while maintaining low birth rates and accepting only small number of migrants. But it rises also in the US and Germany in coming decades in spite of their fairly open migration policies. China went from having a high dependency ratio in 1980 (due to the large number and share of children in its population – and was one of the reasons behind its “one-child” policy adopted around that time). By the year 2000 China enjoyed a very favourable ratio with plentiful workers compared to dependents, but the longer term ramifications of its demographic policies will be felt in coming decades as workers age and retire. Alone among the examples given here is South Africa, whose much higher birth rates and young median age should keep its working age cohort large relative to its dependent population – of course, in reality, these workers need to be gainfully employed and South Africa is a good example of an economy which has limited scope to provide the quantity and quality of jobs required for its growing population. For the other countries, rising ratios of dependency through ageing raise urgent issues of pension, social security and healthcare expenditures/costs increasing the burden on the diminishing share of the working population. Of course, changes to the typical working age and (especially) the retirement age in each population, will alter these ratios. Although a crude measure and one which has been heavily critiqued (see for example Sanderson and Scherbov, 2015) it nonetheless gives us a good broad comparative guide to a major labour force burden.


Source: US Census Bureau, Current Population Survey 1968-2021 Annual Social and Economic Supplements, Table A-4b.
Note income in 2020 dollars, adjusted for CPI

The labour force-real assets nexus

How labour forces change in size, composition and in the type of work undertaken, greatly impact the relevance or obsolesce of real assets. As the main property types – office, retail and logistics – accommodate businesses which employ many workers, as real estate investors, it is our responsibility to provide physical structures and design which allow these workplaces to be as safe and dignified as possible, and for their operations to be as productive, secure and efficient as possible. And given that the residential sector, for the most part houses workers, (see Andrew’s essay on “Later Living” and David’s essay on “Student Housing…” as exceptions to this however) understanding the dynamics and housing needs of labour markets in a given area is critical in understanding the prospects of its for-sale and/or for-rent housing markets. Demand for many real assets can also be traced directly to the magnitude, composition and behaviours of labour forces: simply how and where they work may influence the need for toll roads or public transit in a given metropolitan area or, if workers can work from home/in any location, the need for digital infrastructure in potentially more dispersed locations, for example


Labour markets today

By November 2021, approximately 3.3 million more people were unemployed than before the pandemic began – and that’s just in the OECD countries alone.4

Still, this is a vast improvement from the 8 million more unemployed in May 2021 compared to pre-pandemic levels, such has been the generally strong economic rebound in the latter nine months of 2021 as vaccination rates moved higher (Figure 3).

The use of job retention schemes by various governments undoubtedly saved many households from financial disaster, held up consumption and also gave employers – especially small and medium-sized enterprises – a lifeline to hold on during the worst months of the pandemic. The OECD5 notes that up to 21 million jobs may have been saved due to governments heavily subsidising hours which were not actually worked (and noting that in April and May 2020, France, the UK and Australia for example had between 30% to 35% of all employees covered by some type of subsidy or job retention scheme). This reduced bankruptcies and even helped support leases to real estate more than had been the case in more “usual” economic recessions.

Lost or diminished incomes have been profound, although in some cases, government support systems actually boosted savings rates and created strong pent-up demand for consumption – which was suddenly released and helped create some of the supply-chain demand-side pressures more recently witnessed.


Source: ILO STAT database as of November 2021.

The ILO Monitor6 reported working hour losses in 2020 were approximately four times greater than during the Global Financial Crisis (GFC) in 2009. In 2020, 8.8% of global working hours were lost relative to the final quarter of 2019, equivalent to 255 million full time jobs (assuming a 48-hour working week) and that “these losses were global and unprecedented”. Generally, strong rebounds were seen in advanced economies through 2021 but outside of the OECD and where vaccination rates are far lower, the ILO reports weaker trends: “globally, labour market recovery from the pandemic has stalled during 2021”. Working hours in high- and middle income countries tended to recover in 2021 while both lower-middle and low-income countries continued to suffer large losses. The ILO has concluded that for every 14 persons fully vaccinated in Q2 2021, one full-time equivalent job was added to the global labour market. This implies that the slow rollout of vaccination in developing countries has been retarding global labour market recovery, increasing the divergence between countries. Remarkably, some countries have lower unemployment rates today than they did at the start of the pandemic and the vast majority of OECD member nations have current unemployment rates considerably lower than at the peak of the pandemic-related closures (of timing of which varied country by country). As seen in Figure 4, some of the latest unemployment rates are remarkably low with Japan on 2.8%, South Korea on 3.1% and a record low of 3.4% in New Zealand.7 Yet some participation rates are also low – this a structural problem faced by both Japan and South Korea and, in large part, given the low female participation rates in both countries. These are barriers which have been around for decades, yet which have been exacerbated by the pandemic. But participation rates have also fallen in other major economies and are thought to be a result of the pandemic and dubbed by The Economist in 2021 as the “great resignation”.8


Source: Oxford Economics and various national statistical agencies, updated in January 2022.
Note: Countries ranked left to right by the biggest improvement between the pre-pandemic and latest unemployment rates.

It seems many workers have been prompted to retire earlier and yet others are forced to delay their retirement plans – actual rates will vary depending on the occupation, location and remuneration levels involved but again there is some evidence that the pandemic has accelerated certain trends already underway.

For example, one recent study9 has found that doctors in the UK are taking early retirement from the National Health Service at three times the rate they were just 13 years ago. Whether through unsustainable working conditions, fear of personal health and safety and/or through the need to provide care in domestic settings, the pandemic has prompted many workers to leave the labour force and retire. Whether they can be tempted to return will depend on rising salaries and real remuneration levels versus the adequacy of retirement income and perceptions of safety in the workplace. The latter point especially being a role that real asset managers and investor-operators have to fulfil.


Death rates higher and birth rates lower: some near term and longer-term considerations for labour markets

At a fundamental level, the increased mortality and morbidity caused directly by Covid-19 as well as excess mortality since the pandemic began has dealt a huge dent to labour forces around the world. Some estimates find that the 4.2 million known death toll from Covid-19 to the end of July 2021 may have been underestimated by 1 million deaths in the 103 countries under study.10 Building on their methodology, The Economist, by the end of November reported 5.2 million official deaths globally from the virus but over 20 million excess deaths since the pandemic began. In terms of analysis on labour force impacts specifically, a recent study11 has found that in the US, Covid hospitalisations of those in the age cohort 19-64 (a rough proxy for the labour force age) was 19.3%, with an intensive care unit (ICU) admission rate of 4.3% and a fatality rate of 2.1%. Although these rates are much lower than for the over 65s cohort, it still represents one of the biggest peacetime reductions in the absolute number of the workforce in the country. They also estimated lost productivity under different scenarios and assumptions and under their mildest scenario found 54 million work days lost to the pandemic in the US alone and 367 million work days lost under their severe scenario.12

In yet another acceleration of long-term structural trends, the Covid-19 pandemic has seen birth rates plummet in the major developed economies and this occurring on top of an already-existing long-term structural trend of birth rate deceleration. This fall in birth rates saw all regions globally (bar Africa) record less than 17 births per 1,000 population, historic or close-to-historic low rates globally even prior to the pandemic (Figure 5).

It remains to be seen whether there could be any sort of rebound post-pandemic as societies aim to return to some type of normal. But given the current environment of inflation, labour shortages and ongoing economic uncertainty, a rebound in the fertility rate and household formation rates is far from certain. A much-reduced cohort of births in late 2020 and through much of 2021 will have lasting impacts on demand for a range of goods and services as that cohort ages. Regarding the sharp drop in fertility rates, at least one study13 contends that the lower birth rates in late 2020 and early 2021 may merely reflect a delay in childbearing that may be compensated by higher fertility in subsequent years – this may lead to additional interactions with women’s labour supply at that time.14 Or the reduction of fertility may be sustained at lower rates and when combined with both ongoing economic uncertainty and employment vulnerability as well as public health concerns, could combine to really reduce population growth notably and for a more sustained period of time. Others have looked at the potential effect of the pandemic on future birth rates15 and concluded, “epidemics manifest a common pattern as far as their impact on population, which is remarkably similar to natural disasters i.e. a steep decline in birth rates followed by gradual increases and then followed by a baby boom”. But impacts may highly likely vary across countries and within countries and very much depend on access to family planning resources, health care generally and the cost-benefit analysis that every family will make when considering labour force participation. The US for example, saw birth rates plummet during the GFC/recession of 2008 and H1 2009 while a survey by the Pew Center in Oct 2009 reported that 14% (of those aged 18-34) and 8% (aged 35-44) of those surveyed were still planning to postpone having a child due to the GFC’s lingering effects.16


Source: United Nations, Department of Economic and Social Affairs, Population Division, World Population Prospects 2019.


Labour mobility: Walls up? Walls down?

For many of the world’s most advanced economies, migration has been a critical source of labour for decades. One of the key tenants of globalisation has been the fairly free flow of labour and in many advanced economies, positive net labour migration has been the only factor keeping overall population growth positive – both in absolute terms, but additionally as immigrants tend to be younger and typically have higher fertility rates than native-born populations. When borders slammed shut – quite suddenly in many countries in the early months of 2020 – as a pandemic containment strategy to restrict the flow of overseas arrivals, this supply of labour, of all skill levels, diminished rapidly. This trend was perhaps less noticeable at first as overall unemployment rates shot higher. But as economies began re-opening and many jobs returned rapidly, international borders opened less quickly and so a labour squeeze has been felt. In many countries, immigration applications have been backlogged and the issuance of work visas to new aspiring workers slowed down and thus the acute shortage of everything from Latin American labourers in the agriculture and construction sectors in the US to Asian homecare, hospitality and healthcare workers in the Middle East.17 Not to mention the net exit of European Union workers in the UK due also to new Brexit rules.

Thus, the demographic impacts of the pandemic more broadly and specifically on workers and their mobility/migration patterns may well leave significant and long-lasting effects. One study18 suggests that the population of Australia may be up to 6% smaller in 2040 than would have been the case without Covid-19. This deficit results from 860,000 fewer births and over one million fewer immigrants. Even assuming international borders open by mid-2022, Australia will have 462,000 fewer people by 2040 it concludes.

Internal migration within large countries which have deployed state/provincial/municipal border restrictions has also been impacted. One recent study19 used big data techniques to study spatial patterns of population migration across 369 Chinese cities since the pandemic began. They found that migration intensity decreased (by a sizable -39%) compared to the corresponding period pre-pandemic, contending that human migration was “severely impacted” by Covid-19. Australia is one of the most migratory nations in the developed world in terms of internal migration with nearly 40% of the population changing address every five years20 and although not all these moves are related to job opportunities, strong labour market churn does make for dynamic housing markets. Yet preliminary observations of the pricing trends of housing markets in Australia not only show strong upward price pressures overall since the pandemic began (in spite of a 99% plummet of immigration since April 2020 from the corresponding period pre-pandemic) but that some regional and rural areas and especially high-amenity coastal locations have seen the greatest price increases. Could it be that Australians, as one of the most urbanised populations in the world,21 have decided to leave the city and settle outside them? It is probably too early to tell but a working theory we currently have and would like to test as more evidence arises in the coming year, is that they are. This will have implications for regional versus urban pricing relativities of real assets and not only in residential markets but for commercial property, infrastructure and other real assets as well. Again, this may represent a pandemic-acceleration of an already existing trend in Australia (and potentially elsewhere). In large part, the trend may be dependent upon how flexibly located a workplace may become and it is to that issue we now turn.

How and thus where, will we work? Welcome to Zoomland.

Another accelerated trend arising from the pandemic and likely to influence labour market participation and the way we approach real estate investment is telecommuting. Not new, the term has been around since at least the mid 1970s (see for example Nilles et al 1976, Harkness 1977, Hewes, 1981 and more broadly the work of Toffler, 1980). But the near-universal adoption of it and related work-from-home (WFH) practices for office workers22 raises the, as yet, unanswerable question of the extent to which it will become a much more prominent feature in the future of work. It raises numerous questions, a few of them including: might candidate pools be massively broadened for a job if it can entirely/largely be done from anywhere with good broadband? And by extension, might this labour price arbitrage make “workplaces” for some industries/occupations, even more globalised as a result? Might increased access to telecommuting and other forms of work flexibility have the potential to reduce gender inequalities in the labour market?23

The implications for real estate are widespread. As jurisdictions around the world raced to shut down movement outside the home as a type of circuit-breaker for the spread of the coronavirus causing Covid-19, a calculation needed to be made of exactly who was deemed “an essential worker” and who was not. Although definitions varied by place and rulings changed over time, in large part office workers were deemed unessential and thus found themselves in an endless stream of zoom calls in their living rooms at home. The future of the office (also covered in a chapter in our previous Global Vision 2021) and which types of office will maintain relevance and possibly even thrive in a post-pandemic world as opposed to those segments which may suffer high vacancy, falling rents and values and ultimately become obsolete, is yet to be fully revealed.

Our current view is that a bifurcation of the market will proceed with the highest-quality, highest ESG credentialled stock likely to outperform going forward, especially those containing the highest hygiene, health and safety features which are increasingly likely to become standard.

The pandemic will accelerate the health and wellness trend of office space requirements in much the same way as the terrorist attacks in 2001 hastened safety, security and evacuation features of prime offices in global cities in the years that followed. The typical office-occupying tenant will see far greater expenses in hiring and retaining staff than in paying their rent. We feel that the calls for the death of the office are thus overplayed.

Nonetheless, the post-pandemic office needs to be safer, more efficient and productive and thus more relevant than ever before and each occupier will need to calculate their new space needs accordingly. Aside from usual considerations about the space needed for headcount growth and business expansion, new considerations around the share of workforce who can work flexibly and work from home (WFH) and the number of days per week will also be determined on a tenant-by-tenant basis.

This could also have profound implications for commuting patterns and thus ridership and investment needs of transit systems as well as for the wider eco-system of businesses and their space needs in downtowns and other office precincts. The “live work play” investment thesis for certain assets and urban precincts common in the years prior to the pandemic and a much-treasured aspiration of urban planners and policy-makers for decades, was certainly challenged by the pandemic and its containment responses. Worst hit sectors of accommodation, food and beverage, retail and the arts were all critical to the tenant mix of such precincts. Our base case is that such locales will bounce back if they are designed well and a sense of normality returns post-pandemic – in much the same way as resilient cities have seen such locations thrive even after terrorist attacks would target such vibrant precincts. But investment commitments not only from institutional capital and the private sector broadly but also from the public sector will likely be needed to enhance resilience and likely some cities will perform better than others.

The contrasting fortunes of retail and logistics were also brought into sharp contrast as a result of the pandemic and we also dealt with the future of those sectors in last year’s Global Vision and they are worthy of a brief recap here. Actually, in several previous editions of Global Vision, we had noted the key structural trend of e-commerce expansion challenging traditional retail formats in many locations while at the same time insatiably absorbing quality logistics space.

The massive increases in e-commerce adoption and in the value and volumes of home deliveries during the pandemic cleaved those trends even more. Labour market trends have broadly matched these fortunes: a number of e-commerce and third party logistics firms are desperately scrambling to find staff to fulfil their expanded operations whereas retail sector workers for the most part were slower to be rehired.

Hotels and hospitality assets present an interesting case in that they suddenly became almost irrelevant – and almost immediately – when travel and tourism halted in many places at the start of pandemic lockdowns. But a number of jurisdictions saw collaboration between health authorities and hotel operators to re-purpose them as quarantine facilities and thus allow some movement of travellers while also keeping hotel revenues afloat. With employment in tourism and travel sectors decimated during the pandemic, the ability of selected hotels to operate as quarantine facilities and observe strict social distancing protocols does raise questions around the extent to which pre-pandemic levels of staff may need to be re-hired when normal levels of tourism and travel resume once more. The need for hotels should persist even if it takes a few more years for tourism and business travel to return to pre-pandemic levels, but the labour forces required to operate these facilities may well be different and potentially require fewer workers than previous requirements. For certain locations which are heavily dependent on hotel employment, this may prove a lasting challenge.


An understanding of labour force dynamics and the relevance of real assets is impossible without a grip on the continued deployment of automation in the economy, in workplaces and in our everyday lives and how automation may increase economic growth, output, efficiency and also offer tangible improvements to health and safety. Technological change including automation, digitalisation and the use of artificial intelligence were already replacing some – and creating other – jobs. For decades, some analysts had worried that massive job losses and displacement of human workers by big tech would occur and although there is ample evidence of this – on a net basis, these trends tend to create more jobs (and often higher skilled and better paying jobs). Technology “came to the rescue” of many jobs during the pandemic – from teachers and medical specialists teaching and consulting on zoom, many for the first time, to restaurants surviving due to online delivery. The World Economic Forum24 among others, expect that post pandemic technology adoption in the workplace will continue unabated or more likely, to be accelerated.

One recent study25 provides data on the 60 occupations that employ the most workers in the US and which have the highest and lowest susceptibility to automation in the next 10 to 20 years. Three occupations, each with more than 2 million workers in the US and which have a high-risk score for automation are: cashiers; retail salespersons, and secretaries/administrative assistants. While one of the highest risk scores of all was for restaurant/lounge/coffee shop hosts. This raises relevant questions of how retailers and especially food and beverage service providers may need to rethink their strategies on delivery, location and space requirements, and fit-outs etc, not just due to trends underway before the pandemic but especially as a result of the pandemic and changed consumer behaviours.

In contrast, elementary and middle school teachers and registered nurses (both occupations employing more than 3.2 million in the US) as well as chief executives (there are 1.6 million of those in the US) had the lowest automation risk scores. It appears the new economy very much needs such occupations although some questions remain around the extent to which some of these occupations may work more flexibly. While CEOs were always a fairly mobile group in terms of their actual location of work, undoubtedly new conceptions of office organisation will continue to see them play a central, visible and “real” role as well as the virtual one. While in spite of the considerable accelerations made in both online teaching and healthcare provision, it would seem that there remains an overwhelming need/preference for real rather than virtual connections in education and healthcare suggesting those specialised real assets will retain and highly likely increase their relevance as a result of the pandemic’s impacts.

Thus, automation of jobs should continue, with potentially millions losing jobs globally to machines, robots, artificial intelligence and other advancements but this also requires the employment of researchers, engineers, systems analysts, information technologists and many others. But it also brings us full circle to the issue of the shrinking and aging workforce in many advanced economies and the burdens associated with the rising dependency ratios (see Andrew’s essay on “Later Living”). Whether this amounts to a net loss or net gain will vary city-by-city and even by location within them. For real estate though, whether a facility houses human workers or the automatic systems which replace them, operations still need to be appropriately accommodated. Typically, automation requires even higher standards of construction and fit out and in the case of logistics facilities, this may include more perfectly level floors, better ventilation, higher connectivity to broadband and expensive, sophisticated racking systems, for example. This generally requires operators to take longer leases and in order to maintain a competitive edge, a move to higher standards across the sector.

What are some lessons the pandemic is teaching us about demographics and real assets?

Upon considering these demographic trends and how many of the challenges have been exacerbated or amplified by the pandemic, what are just a few considerations investors may take on board?

Invest in resilient and safe assets

We have long maintained that real estate relevance implies a flight to quality and buying (or creating) prime stock is essential not only for superior investment returns but beneficial to our investor-operator model and to broader societal aims as well. Whether they be seismic standards in Japan or California, investing in assets above flood-plain lines or rising sea levels in coastal locations or providing better air conditioning or evacuation systems in our assets, the pandemic is a reminder that standards could and should be raised higher for the benefit of an asset’s ultimate occupiers – its workers. One recent study26 analysed data on 800,000 commercially insured individuals in the Greater Philadelphia area and found that during lockdown, essential workers were 55% more likely than others to catch Covid-19. Every society, even down to very specific jurisdictions will have a different determination of what exactly is “essential work” at any point in time and the extent to which it can be done remotely. Examples of such workers globally included highly skilled medical professionals, however, also those remunerated at among the lowest rates – cleaners and sanitary staff, providers of aged care, those responsible for the production, processing and distribution of food and so on. Workplaces must be made as safe as possible for all and our asset management strategies must continue to work hard on this.

Implications for investors: aspire to the highest of standards and strive to raise the bar on building quality where possible. Being socially responsible through investment in safe and resilient assets additionally pays off with generally higher investment performance.

Consider gender impacts

The pandemic and its sudden reshuffling of how labour took place, highlighted several disparities and stark among them was an unequal burden on women. For example, the share of female workers in South Korea who took leave of absence during the pandemic was more than double the percentage of men, while women experienced higher unemployment than men and married women experienced more adverse outcomes than unmarried women workers and thus the pandemic reproduced existing gender inequalities in the labour market in that country.27 This situation was far more widespread than in South Korea alone.

Extensive research has found that recent recessions in advanced economies usually had a disproportionate impact on men’s employment, (sometimes dubbed “mancessions”) yet at least one study28 shows that the pandemic recession of 2020 was a “shecession” in most countries with larger employment declines among women.

The research found that both the composition of women’s employment across industries and occupations as well as increased childcare needs during closures of schools and daycare centres were factors. The research observed differences between shecessions and mancessions arise from the different dynamic behaviour of women’s and men’s labour supply with women’s labour supply generally more elastic than that of men, suggesting that in a shecession, lowered earning prospects after an unemployment spell are more likely to result in a reduction in labour supply.

The study warned that “a shecession reduced households’ ability to self-insure against income shocks, resulting in a stronger transmission from income shocks into consumption demand”. The highly gendered impact of the pandemic crisis makes us responsible as real assets investors to better understand how the commercial and residential assets we invest in may be more supportive of tenants and give workers greater choices over where, when and how they work, and strategies to sustain, and even boost, their productivity in the process. For large assets with several hundred workers, this could mean the incorporation of a childcare facility on premises, for example.

Implications for investors: consider more family-friendly work arrangements and encourage real estate formats, locations and designs which assist tenants to better accommodate families and women, in particular.

Target critical workforce housing

In very few societies are many essential workers – take nurses, teachers and first responders for example –very highly remunerated, with the bulk of them occupying middle-income or even lower-middle-income strata. Yet housing costs in many of the world’s largest cities were expensive pre-pandemic and in most cases are even more expensive now. But cities can’t exist without such critical workers yet those very workers can scarcely afford to rent accommodation in them, let alone buy housing. Somewhat ironically, in those cities that have public housing and social housing programmes, these workers though may not qualify as their income levels are too high.

There is an urgent need to broaden housing options for middle-income and lower-middle-income workers and create workforce housing proximal to employment nodes such as fringe CBD areas or for a specific occupation group, say nurses, which is adjacent to hospital campuses. Some research has examined this problem and one29 found that in the US cities of Atlanta, Jacksonville and Nashville, three major challenges to building mixed-use communities were identified: the high price of land; the disproportionate regulatory burden associated with affordable housing subsidies and the need for better coordination at various levels of government. Similar issues are present elsewhere and our investment programmes must overcome such barriers30 in order to build such stock.

Implications for investors: in addition to targeting mass, middle-class housing options in growing cities, consider investing in niche assets targeting a specific occupation in an appropriate micro-location by which to expand housing options for critical workforces.


A fuller view of the global labour market can only really be gained when risks have subsided of it being constrained by further mandatory Covid restrictions, school closures, travel bans and border closures etc. But it is already evident that the pandemic has had irrefutable impacts on each of the core demographic processes of mortality, fertility and migration: the former has dramatically increased, whereas the latter two have plummeted. It is yet to be seen if both fertility and migration will stage sizable rebounds to compensate for their declines of 2020 and 2021 but the labour markets and society in general will highly likely see a reduced “Covid cohort” go through the education system and eventually reach the labour force in about two decades or so from now and be quite reduced in number from those born in 2019 or the years prior. This will have ongoing aggregate demand diminution for all sorts of real assets related to consumption of goods, services and housing, for example. It raises the questions of what lasting effects the pandemic may have for the years to come around processes of family formation, and choices in the labour and housing markets etc. Reduced fertility consequences may though help spur new political and policy impetus for support to help family formation. Perhaps it takes an existential crisis for societies to find the political and corporate willpower to bring about more just social and environmental outcomes. The labour force issues covered in this essay and the role of real assets in housing workforces, are a critical part of that.

Of course, if there is anything we have learned about the Covid-19 pandemic thus far is its highly unpredictable course. Although many global labour markets have staged remarkable rebounds in recent months, new concerns around high inflation and geo-politics provide new challenges. Any number of downside risks may provoke large scale job shedding once again. With governments increasingly strapped for resources, the financial and other support for employers and workers may be less generous in upcoming periods. Thus, the relatively cautious optimism we have towards labour markets right now, has the potential to sour in 2022. One thing is for certain – real asset investors, developers and operators will need to work hard to ensure their assets are safe, secure, efficient and relevant to workers of the human-kind, and increasingly, of the robotic-kind.


Additional references

Demmou, L., Franco, G., Calligaris, S., Dlugosch, D. (2021) Liquidity shortfalls during the Covid-19 outbreak: assessment and policy responses, OECD Department Working Papers, No 1647, OECD Publishing, Paris

Dingle, J. and Neiman, B. (2020) How many jobs can be done at home? Journal of Public Economics, Vol. 189/104235

Frey, C.B. and Osborne, M.A. (2017) The Future of Employment: How susceptible are jobs to computerization? Technological Forecasting and Social Change 114, pp 254-280

Hadjibeyli, B. Roulleau, G, and Bauer, A. (2021) Live and (don’t) let die: the impact of Covid-19 and public support on French firms, French Treasury Working Paper, No. 2021-2. Available at

Harkness, R.C. (1977) Technology assessment of telecommunications/transportation interactions Menlo Park, SRI International

Hewes, J.J. (1981), Worksteads: living and working in the same place, New York, Doubleday

International Labour Organization and the Inter-American Development Bank, 2021 Jobs in a Net-Zero Emissions Future in Latin America and the Caribbean, Washington DC and Geneva

International Labour Organization Monitor 2021 September COVID-19 and the World of Work Updated Estimates and Analysis, ILO Monitor, 8th edition.

Luppi, F., Arpino, B., Rosina, A. (2020) The Impact of COVID-19 on Fertility Plans in Italy, Germany, France, Spain and the UK, Demographic Research, Vol. 43, 00 1399-1412

Nilles, J.M., Carlson, F.R., Gray, P. and Hanneman, G.G. (1976) The Telecommunications-Transportation Tradeoff, New York, Wiley

OECD (April 2021) An assessment of the impact of COVID-19 on job and skills demand using online job vacancy data. Available at

OECD (November 2021) Unemployment Rates, OECD Updated. Available at

Sanderson, W.C., Scherbov, S. (2015) Are we overly dependent on conventional dependency ratios? Population and Development Review, 41 (4) pp 687-708.

Toffler, A. (1980) The Third Wave, New York, Morrow


1 ANZ Research (December 2021), ANZ Australian Job Advertisement Series. Available at

2 “South Africa jobs bloodbath – unemployment rate hits new record”, BusinessTech (30 November 2021). Available at

3 For example, Flynn (Flynn, L.B. 2019, The Young and the Restless: Housing Access in the Critical Years, West European Politics, Vol 43, Issue 2 pp 321-343) looked across 20 OECD countries to examine how increasing income and wealth inequality interacts with housing markets to create an uneven playing field both within and across generations and finds that fewer adult children live in the parental home in those countries with deep mortgage markets, high levels of social rented housing, tax relief for ownership, low buyers’ transaction costs and high residential mobility. How labour markets are structured and function are thus critical in how residential markets perform.

4 OECD November 2021

5 OECD, November 2021

6 International Labour Organization Monitor (January 2021), Covid-19 and the World of Work, ILO Monitor, 7th edition.

7 Unsurprisingly given such tight labour markets, South Korea and New Zealand have seen their Central Banks tightening among the most aggressively of all developed-economy Central Banks in recent months.

8 “How to manage the great resignation: high staff churn is here to stay, retention strategies require a rethink”, The Economist, Bartleby Column (27 Nov 2021 )

9 Moberly, T. (2021), Doctors’ early retirement has trebled since 2008, British Medical Journal, 373 n1594

10 Karlinsky, A., Kobak, D. (2021) Tracking excess mortality across countries during the Covid-19 pandemic with the World Mortality Dataset, Epidemiology and Global Health. Available at accessed 28 Nov 2021

11 Walmsley, T., Rose, A., Wei, D. (2021), The impacts of the coronavirus on the economy of the United States, Economics of Disasters and Climate Change, 5, pp 1-52

12 These estimates do not include lost productivity from caring for others who had Covid-19.

13 Kearney, M.S. and Levine, P.B., (2020), Half a Million Fewer Children? The Coming COVID Baby Bust, Brookings Institution Report.

14 In another study, De Rose et al (De Rose, A.F., Ambosini, F., Mantica, G. and Terrone, C. (2021), Impact of COVID-19 on birth rate trends in the Italian Metropolitan Cities of Milan, Genoa and Turin, Public Health Vol 198, Sep, pp 35-36) compared data on birth rates from Nov 2019 to Jan 2020 (pre-pandemic) and during the same period of the following year (during the pandemic) and found the birth rates in Milan, Genoa and Turin all in northern Italy, decreased by 55%, 12% and 33% respectively. The authors observed in Milan and Turin, the restrictive measures were in place for a longer period because of the increased transmission rates in those cities compared with Genoa. They concluded these restrictions had direct and predictable impacts on local birth rates and that these findings were broadly in line with demographic effects of previous pandemics.

15 Ullah, M.A., Moin, A.T., Araf, Y., Bhuiyan, A.R., Griffiths, M.D. and Gozal, D. (2020), Potential effects of the COVID-19 pandemic on future birth rate, Frontiers in Public Health Vol 10, Dec.

16 Livingston G, D’Vera Cohn, “US Birth Rate Decline Linked to Recession Pew Research Center” (6 April 2010). Available at

17 The National Bank of Kuwait reported that its population declined in 2020 at the largest rate in 30 years (since the Gulf War) in large part due to the -4% fall of its expatriate and foreign workers leaving during the pandemic. Source: National Bank of Kuwait, Economic Research Department (2021), Kuwait Population Falls to Below 4.7 Million as Expat Numbers Drop, Kuwait City

18 Charles-Edwards, E., Wilson, T. Bernard, A., Wohland, P. (2021), How will COVID-19 impact Australia’s future population? A scenario approach, Applied Geography Vol 134

19 Lu, D., Xiao, W., Xu, G., Ha, L., Yang, D. (2021), Spatiotemporal Patterns and Influencing Factors of Human Migration Networks in China During Covid-19, Geography and Sustainability, Vol 2, Issue 4, pp 264-274

20 Bell, M. Charles-Edwards, E., Ueffing, P., Stillwell, J, Kupiszewski, M., Kupiszewska, D. (2015), Internal migration and development: comparing migration intensities around the world, Population and Development Review, 41, 1, 33-58

21 Some 86% of Australians live in cities according to the World Bank, a higher share than in the US, UK, France or Germany on 84%, 83%, 81% or 77% respectively, yet lower than Japan’s urbanisation rate of 92%.

22 And by other occupations such as teachers, consulting medical staff, counsellors, even certain performers and many others.

23 Given that much of today’s labour market gender gap arises from the “motherhood penalty” (i.e. where women’s remuneration starts to lag that of men after having children). Thus, one thought is that if future workplaces are more flexible, the motherhood penalty may shrink and with it, a reduction of gender inequality

24 World Economic Forum (2020), The Future of Jobs Report 2020. Available at

25 Broady, K.E., Booth-Bell, D., Coupet, J., Macklin, M., (2021) Race and jobs at risk of being automated in the age of COVID-19, The Hamilton Project, Brookings. (using a risk score developed by Frey and Osborne 2017).

26 Song, H., McKenna, R., Chen, A.T., David, G. and Smith-McLallen, A., (2021) The Impact of the Non-essential Business Closure Policy on Covid-19 Infection Rates, National Bureau of Economic Research, Available at

27 Ham, S. (2021) Explaining gender gaps in the South Korean labor market during the Covid-19 pandemic, Feminist Economics Vol 27, Issue 1-2, pp 133-151

28 Alon, T., Coskun, S., Doepke, M., Koll, D., Tertilt, M. (2021) From Mancession to Shecession: women’s employment in regular and pandemic recessions, Working Paper 28632, National Bureau of Economic Research.

29 Glover, R.L., Carpenter, A., Duckworth, R. (2017) Developing inclusive communities: challenges and opportunities for mixed-income housing, Community and Economic Development Department, Federal Reserve Bank of Atlanta

30 One possible solution may have been identified by Nicholas and Juergensmeyer (Nicholas, J. and Juergensmeyer, J. (2019) A rational nexus approach to workforce housing land development conditions, UIC Law Review Vol 52, Issue 3) whose approach presents a method to provide workforce housing in new residential and commercial developments and rather than following the common approach of set-asides through inclusionary zoning, it offers a formula to calculate the exact need for workforce housing units generated by new developments. It then precisely calculates the number of employees generated by a development and then the number of those employees that need affordable housing due to their income levels. Their cases were drawn from local government areas of the fairly small, yet very expensive, towns of Jackson/Teton County, Wyoming, Aspen/Pitkin County, Colorado and Islamorada, Florida.