American workers are quitting their jobs by the millions every month taking advantage of new opportunities created by the pandemic recovery, and creating an unprecedented labor shortage for companies.
In October, 4.2 million Americans resigned, after 4.4 million in September and 4.3 million in August, according to data from the Labor Department.
Meanwhile, new applications for unemployment benefits last week fell to just 184,000, the lowest level since September 1969, the Labor Department said Thursday.
There are 11 million job openings, and the number of vacancies is peaking as demand picks up in bars, hotels, restaurants and other service industries.
The economy remains about four million jobs short of the pre-pandemic level, and even though job gains have averaged 555,000 a month this year, hiring, especially unskilled staff willing to work in person, has become a headache for many employers.
“We’ve never had a gap like that where there’s just so many more openings and there are unemployed workers,” said Curtis Dubay, economist at the US Chamber of Commerce.
The pandemic is changing attitudes to work, he told AFP.
“Jobs that are traditionally less pleasant and with less skills are having a harder time retaining workers. Workers are just not putting up with it anymore.”
– The great resignation –
Since April, a record number of workers, the overwhelming majority in low-skilled jobs in the service sector, have quit, no longer concerned that they will struggle to find a new position.
The hashtag #GreatResignation is trending on Twitter, with one post offering this explanation: “We’re leaving jobs because we have nothing to lose.”
The author called on companies to show “more human kindness and compassion,” and step up their offers on remote work, health care and retirement savings. “Bring your best to the table and maybe we will too.”
Erik Lundh, economist at The Conference Board research center, said the current environment definitely gives workers “more bargaining power, in terms of negotiating for benefits and wages.”
There are signs employers are raising pay and improving benefits to try to attract workers.
The share of job offers offering signing bonuses in addition to the base salary has more than doubled since March 2020 at the start of the pandemic and October 2021, according to a study by The Conference Board published on Wednesday.
And the prevalence of bonuses is more marked for manual work that does not require a university degree and cannot offer telework, as well as for jobs in industries facing the greatest labor shortages, notably education and healthcare.
The trend is expected to continue next year.
“Most companies are looking at almost a four percent jump in wages next year,” Lundh said.
Lydia Boussour, economist for Oxford Economics warns that the tight labor market could “exacerbate current inflationary dynamics.”
The rapid turnaround in the labor market following the damage inflicted by Covid-19 came as a surprise to most forecasters and policymakers.
Unemployment peaked in April 2020 at 14.8 percent — the highest since the government started measuring the data in 1948 — but by last month it had dropped to 4.2 percent.
Policymakers have welcomed signs employers are willing to pay more since wages had stagnated for years.
Dubay notes that Americans forced to stay home during the pandemic built up a stockpile of savings — helped by massive government aid — and therefore can afford to quit their jobs and take time to get back to work.
But he expects the situation to get back to normal in coming months.
In the current dynamic, however, “It’s very risky for firms to let go staff unless they have no other choice, because re-hiring people later will be difficult and likely expensive,” said Ian Shepherdson of Pantheon Macroeconomics.
