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What has been called the “Great Resignation” became greater in August, with 4.3 million Americans, about 2.9 percent of the entire workforce, quitting their jobs during the month, according to the U.S. Bureau of Labor Statistics (BLS).
That number tops the 2.7 percent that quit in July and sets a record for the monthly “quit rate” since the BLS began tracking the number in 2000. The number has set records or near-records for five consecutive months.
Workers in low-wage, dead-end jobs led the way to the exits:
- 892,000 workers quit restaurants, bars, and hotels;
- 721,000 clocked out of jobs in retail;
- 706,000 left jobs in professional business services;
- 534,000 walked away from work in health care services and social assistance.
There were 11.1 million U.S. job openings in July and 10.4 million in August, giving workers unhappy in their jobs a range of opportunities to do better.
“If you’re unhappy with your job or want a raise, in the current environment it’s pretty easy to find a new one,” PNC chief economist Gus Faucher told CNN Business. “We’re seeing people vote with their feet.”
The Great Resignation is the kind of thing that “happens after great wars or depressions,” Joe Brusuelas, economics chief at RSM, said in a CNN interview.
“It’s hard to spot while you’re in it, but we’ve gone through a shock that has elicited an unexpected change upon the population and it will take some time to sort through,” he said.
Brouselas calls this a “golden age for the American worker,” in which “the American worker is now confident that he or she has the bargaining power and can obtain a reasonable wage—and have influence over the shape of working conditions,” he added.
The wave of resignations is bringing other structural changes to the labor market, according to a new study by the Bank of America (BoA).
Before COVID arrived, the labor force participation rate—the number of available workers with, or actively seeking, jobs—was 63.3 percent.
In August this year, it was 61.7 percent; in September, it dipped to 61.6 percent, the BLS calculated.
The participation rate will recover to 62.6 by the end of next year, but not increase during 2023, even though the number of available workers might grow, the BoA study said.
Another structural change: “rapid wage growth,” the report noted, especially in sectors notorious for low pay.
Wages rose 4.6 year over year in September for the workforce as a whole, but ballooned 10.8 percent for workers in leisure and hospitality businesses.
TREND FORECAST: Why are people quitting? As we have pointed out, many jobs don’t pay living wages. (See “RETAIL WORKERS QUITTING IN DROVES,” 29 Jun 2021.) In fact, we had noted that in our article (“End of Federal Jobless Benefit Won’t Bring Many Back to Work,” 28 Sep 2021) that fewer people are willing to accept low-paying, dead-end jobs and have gone in search of a more fulfilling work life.
TREND FORECAST: These structural job shifts were never expected when politicians launched the COVID War in 2020.
First, research by the Federal Reserve Bank of Chicago found a “remarkably strong relationship” between workers quitting and jobs offering higher pay. This indicates workers are migrating from lower-wage to higher-wage jobs, raising incomes for millions of employees.
That also could mean these better-paid workers would be more productive, contributing to a higher U.S. GDP.
Companies dangling higher pay now to attract good workers will not be able to cut pay later when inflation calms down and the economy settles. Higher wages are here to stay.
Second, while companies in low-wage industries, such as retail, shipping, packaging, delivery food service, hospitality, etc. will recognize the need to value employees more highly… some of the Bigs will be paying higher salaries and offering better benefits.
However, with economic conditions deteriorating and a sizable segment of society banned from every-day life of jobs and enjoyment because they have not gotten the COVID jab, many small and medium businesses will not have the revenue stream needed to raise wages.