In US, 4.5 million people handed in their resignations in November, an all-time monthly high, according to newly released government data.
The number tops the previous high of 4.4 million people who left their jobs in September. The US Department of Labor reported that over 1 million workers quit in November alone from leisure and hospitality companies, such as restaurants, bars and hotels. In comparison with the previous year, that’s a 60 per cent increase for the industry, one of the largest employers.
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The data shows that the “Great Resignation,” as some experts prefer to call it, continues apace amid a very tight labour market. In a highly competitive labour market, employers are raising wages and offering incentives such as hiring bonuses, which is leading to many employees quitting lower-paying jobs in order to take up more lucrative positions.
Liz Wilke, the chief economist at payroll services company Gusto, told CBS MoneyWatch that the quit rate in November was really big, absolutely and relatively. This is a reflection of the economic recovery and momentum of the economy, he added.
Based on Gusto’s clients’ reports, the quit rate is expected to remain high in December, as the same percentage of workers quit in November. Wilke noted that most turnover occurs in lower-paying industries, where employees are moving to new jobs to find higher pay, greater flexibility, and better benefits.
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The economy hired 6.7 million workers even as 4.5 million people quit their jobs, tweeted Heidi Shierholz, former chief economist at the Labor Department and now president of Economic Policy Institute.
“People who quit are taking other jobs, not leaving the workforce,” Shierholz noted.
In the latest #JOLTS data, 4.5 million people quit, but *6.7 million* people were hired. People who quit are taking other jobs, not leaving the workforce. On net, the labor market is gaining a ton of jobs every month. 2/
— Heidi Shierholz (@hshierholz) January 4, 2022
As infections in the United States top 1 million cases per day, Wilke noted that about 4.3 million people became entrepreneurs last year. This is due to COVID-related issues, such as juggling work and childcare. As infections around the US top 1 million cases per day, this may be the reason behind some Americans stepping back from their jobs.
According to the St. Louis Federal Reserve Bank, 3.3 million Americans decided to retire between January 2020 and October 2021 – nearly twice as many as expected, given normal demographic trends.
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Labor Department figures show employers posted fewer job openings in November than in the prior month, down to 10.6 million from about 11 million. According to the Bureau of Labor Statistics, new job postings declined by about 260,000 in several industries, including accommodation and food services.
November’s labour-market data is from before the current coronavirus scare. Omicron’s rapid surge and the sharp increase in COVID-19 cases in December and January could pose new headwinds for the labour market.
Michael Pearce, a senior US economist at Capital Economics, said that an increase in infections is already impacting the demand in high-contact sectors, but the greatest effect will be on labour supply as workers who test positive are forced to isolate.
