People Are Quitting Their Jobs At A Record Rate: What’s Going On?

This article was originally published by Mish Talk.com.

Quits Levels and Rates

Quits Levels and Rates are part of the BLS’ monthly Job Openings and Labor Turnover report.

Quits are the number of quits during the entire month. The quits rate is the number of quits during the entire month as a percent of total employment.

The quits rates are at the highest level in the history of the series.

People are Just Quitting 

The WSJ article Forget Going Back to the Office—People Are Just Quitting Instead caught my eye.

In April, the share of U.S. workers leaving jobs was 2.7%, according to the Labor Department, a jump from 1.6% a year earlier to the highest level since at least 2000.

The shift by Americans into new jobs and careers is prompting employers to raise wages and offer promotions to keep hold of talent. The appetite for change by employees indicates many professionals are feeling confident about jumping ship for better prospects, despite elevated unemployment rates.

While a high quit rate stings employers with greater turnover costs, and in some cases, business disruptions, labor economists say churn typically signals a healthy labor market as individuals gravitate to jobs more suited to their skills, interests and personal lives.

A Look at Raw Numbers

Quits Level Details

Interestingly, quits in leisure and hospitality jobs (the vast majority are food service and accommodation), are below levels in 2019.

Leaving for Where? 

Are people hopping jobs or doing something else? Let’s see if we can get a handle on that question with a look at employment changes by age.

Employment Change in Thousands 

Retirement

Between February 2020 and May 2021, 5.3 million people aged 60-64, on average a highly skilled aged group, just said no to working at all.

That is the only age group in which the February 2020 to May 2021 decline was greater than the initial plunge from February 2020 to April 2020.

Workers aged 60-64 did not quit for greener pastures, they just quit. This strongly smacks of retirement.

The loss of those skilled workers increased the demand for skilled labor across the board.

It’s important to note that that decline of 5.3 million in age group 60-64 is for a period of 15 months. Quits are one-month totals.

Total Quits for April of 2021 alone were a record 3.9 million demonstrating the extreme flexibility of the US labor force.

Synopsis 

1. Supply chain shortages and Covid-disruptions put upward pressure on costs which in turn put upward pressure on wages.
2. Retirement of skilled baby boomers put additional upward pressure on wages.
3. Increased work-at-home turned what was once local or regional demand into competitive national demand for workers.
4. Unemployment benefits that payed people more to not work than to work kept millions at home happily not working.
5. Rising wages and increasing demand for labor with companies competing nationally for work-at-home labor is the final piece of the puzzle.

Not Just Age 60+

Despite Wage Increases, Real Hourly Pay Is Losing to Inflation

In spite of those five points (an added Tweet making 6) , please note that Real Hourly Pay Is Losing to Inflation.