Not too long ago, the idea of quitting a job seemed all but impossible. Where would you go? Who else would hire you? How would you ever make ends meet?
But that was before the Covid-19 pandemic. Before the rising economy. Before one of the strongest hiring markets in modern memory.
Today, workers have the power and they know it.
You can see it all over the country, in larger cities and small towns. Suddenly, every company everywhere is hiring in just about every industry. Why? Because workers are qutting at historic rates in search of better pay and better working conditions, and experts believe that this trend may just be getting started.
By the numbers: A starggering 4 million workers quit their jobs in April, according to the Labor Department’s latest JOLTS report. That’s a 20-year record. The rate of workers voluntarily leaving their jobs also hit an all-time high of 2.7% that month.
For comparison, in the middle of the last recession, in August 2009 the adjusted and non-adjusted quits rates were 1.4% and 1.7%, respectively. Just as now, that changed as the economy rebounded and by 2018 about 3.5 million people were quitting their jobs every month with the quits rate peaking at 2.9%.
This isn’t going away anytime soon: “We could see sustained, very high levels of quits throughout the summer at the very least. As long as the labor market remains this tight and employers are competing for workers, you will see people learning about exciting new opportunities and making the switch.” — ZipRecruiter Economist Julia Pollak
Where are people quitting? This isn’t uniform across industries, with some sectors hemorrhaging workers while others remain steady. The sectors seeing the most churn according to the most recent report include:
- Hospitality / food service: 5.6%
- Retail: 4.3%
- Education: 2.3%
- Healthcare: 2.3%
What do these fields all have in common? They were battered during the pandemic, leading to widespread layoffs, and are typically lower paid with high in-person contact. As a result, many people just aren’t interested in doing these jobs anymore. It’s as much about working conditions as it is wages.
My take: Here’s the thing, we’re coming out of a once-in-a-generation economic disruption and no one yet knows what the future looks like. But comparing today’s labor market to what we saw after the 2008-2009 finanicl crisis is illuminating. The job market was tight while the economy was down, then everything opened up as conditions improved. Then, by 2019, the labor market was tight again.
Maybe this turn of the cycle is something entirely new, or maybe it isn’t. We’ll have to wait and see.
