Americans continue to leave their jobs at near-record rates, with 4.3 million people resigning in January, the government said on Wednesday. Economists have pointed to a tight labor market to drive the so-called “Great Resignation”, but the workers themselves are to blame for poor pay, bad opportunities and bad bosses.
The Great Resignation has led to a reassessment of work, with employers deploying more generous benefits and salary packages to hire and retain workers. But employees are increasingly looking for more jobs, including better compensation and more flexibility, leading to a record dropout rate.
Low wages, lack of opportunities for promotion and a lack of respect for work are the top three reasons why Americans quit their jobs in 2021, with about 6 out of 10 workers citing these reasons as drivers of his resignations, according to a new Pew report. Research based on the responses of people who resigned last year.
And there’s a very real benefit to quitting smoking, Pew found: Most people who switched to new roles said they were actually enjoying a higher salary and now see more opportunities to advance.
Workers are likely to have the advantage for a while, economists noted. On the one hand, the number of job vacancies in the US is still high, with 11.3 million jobs open in January, according to the latest figures. Simply put, there are not enough workers available for the number of jobs that employers want to fill.
“People I’m talking to now, and it’s March, say they’re still seeing the wear and tear as crazy,” said Ron Hetrick, a senior economist at Emsi Burning Glass., he said during a conference to talk about the latest data on job vacancies and the dropout rate.
The drop-out rate and the number of job vacancies mean that “we need employers to do something different to get people in the door,” said Rucha Vankudre, also a senior economist. Emsi Burning Glass.
Wage growth vs. inflation growth
Some employers are trying to do something different, with many wages rising to lure workers to the door. Average hourly earnings rose 5.1% in February compared to a year earlier; but that was not enough to offset inflation, which rose 7.5% in January. The February inflation rate, which will be released on March 10, is expected to remain high.
Low-wage workers in the United States are experiencing some of the largest wage increases, with leisure and hospitality workers enjoying a wage increase of 11.2% compared to the previous year . However, their salaries are usually lower than in other industries, which means that these robust gains represent an increase of only “cents” per hour once inflation is included, according to a new analysis by the Brookings Institution. .
Childcare crisis that keeps women out of the workforce
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It is perhaps not surprising, then, that low-paid workers and Americans without a college degree were the most likely to quit their jobs last year, Pew found.
About one in four lower-income workers quit their jobs in 2021, compared to about one in 10 higher-income workers, Pew found. About 17% of people with a high school diploma dropped out last year, compared to 22% of those with a high school diploma or less.
Americans say there are other reasons for them to give their warnings, with about 48% blaming child care problems. With the high costs of daycare and school closures due to the pandemic, some parents: mostly women – they have reduced the work.
And 45% of workers said they didn’t have enough flexibility to choose their schedules, so they quit smoking last year, Pew found.
The downside to the economy: Some companies may not be able to operate at full capacity because they can’t hire the workers they need, according to Jennifer Lee, BMO’s senior economist.
“For a while, having near-record job openings was great for job seekers and would speak to strong business activity and the corresponding need for more workers,” Lee wrote. “But as he showed last year, being desperate for help (as well as materials) to do day-to-day business is not good when the result is to turn down work.”
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