A staggering 4.4 million Americans quit their jobs in September, narrowly surpassing the record established in August (4.3 million), according to data released Friday by the Labor Department.
Economists believe there are myriad reasons for the “great resignation.” A shortage in child care (and the persistence of school closings) has forced many parents to rethink their careers; some Americans are sitting on the sidelines of the labor market until the pandemic gets under control; others sense that better job opportunities exist – there are currently eleven million job openings, according to Indeed.
Business Insider provides key context:
Though the reading initially seems concerning, high quits hint at a healthy labor market. Americans tend to quit when they’re confident in their ability to find work elsewhere. With so many people leveraging worker demand for higher pay or better conditions, the still-high quits signal the labor market will come back stronger than before.
“The vast majority of the quitting we’ve seen in 2021 has been job switching,” Nick Bunker, an economist at Indeed, told The Wall Street Journal. “Industries that usually hire people out of work may have shifted their approach towards poaching.”
The Washington Post reports:
Many workers have made the calculation that their old jobs — low paying work in industries like restaurants, which have really struggled to fill holes — are no longer desirable, even as companies dangle raises and bonuses to lure workers back to the workplace. Some older workers have taken early retirements, part of a portrait of a labor force that has shrunk, by percentage of the U.S. population during the pandemic.
And some economists’ question whether there are other factors that have reshaped the traditional dynamics of the labor force after 750,000 people have died.
Bloomberg adds:
For every unemployed American in September, there were 1.4 openings. While labor mismatches persist, workers remain optimistic about their future income and job prospects. In the Conference Board’s October survey, the share of those who said jobs were “plentiful” held near a record high.
While wages are up, so is inflation – an offset that eliminates gains in real purchasing power. But some economists maintain that increased wages will outlast the increased cost of living.
“I would expect over the next year the price inflation to relent a bit, and most of the wage growth to stay — and so I think they’re going to come out ahead,” Josh Bivens, the director of research at the left-leaning Economic Policy Institute, told The Post. “But yeah, this inflationary spike is definitely a bit into the growth of paychecks.”