‘The Great Resignation’: June’s US jobs report hides unusual trend
June’s numbers suggest economy is continuing to recover at steady pace – but another pattern shows people are quitting their jobs
The Bureau of Labor Statistics reported on Friday that the US economy added 850,000 jobs last month. Hidden by this encouraging figure is the hint of an unusual trend: people are beginning to quit their jobs in extraordinary numbers.
June’s numbers, in combination with last month’s figures, suggest that the economy is continuing to recover at a steady pace. The rate of unemployment was 5.9% and 9.5 million people remain unemployed.
This latest update, along with projections of positive economic growth, was met with notable optimism from the White House and record highs on Wall Street.
Joe Biden, in response to the report, was eager to point out the changing power dynamic of the labor market.
“The strength of our economy is helping us flip the script. Instead of workers competing with each other for jobs that are scarce, employers are competing with each other to attract workers,” he said.
In midst of this uneven recovery, and perhaps somewhat counterintuitively, others have noticed another pattern that may further elevate unemployment rates in the months to come: people are leaving their jobs.
In a move that organizational psychologist Dr Anthony Klotz calls “the Great Resignation”, workers are beginning to quit jobs in the highest rates seen since the Bureau of Labor Statistics (BLS) began to collect this data in 2000.
Number of people quitting their jobs
This trend, according to Klotz, is not only due to pent-up “resignation demand” – fewer people quit their jobs during the early, uncertain months of the pandemic – but also because people are simply feeling burnt out.
According to a recent report from Microsoft, 41% of the global workforce is considering leaving their jobs. Though the intention to quit is not quite the same as the act of quitting, the most recently available BLS data shows that while there were 9.3m job openings in April, almost 4 million people had also quit their jobs that month.
“The economy is seemingly doing very well. There are lots of job openings out there. So, if you’re an employee, that’s empowering for you because you have options,” Klotz said.
Like many other factors of American life, the Great Resignation will not be immune to the racial and economic disparities that exist elsewhere. Socioeconomic differences will shape who is quitting and why.
Sandra Sucher, Harvard Business School professor and author of the forthcoming The Power of Trust, noted that low-wage workers will be particularly motivated to change jobs with even marginally better offers.
“There’s definitely a sense of if I can make more money doing this job, I’ll go for it,” she said.
While there are concrete factors such as better wage and improved savings rates driving these choices, experts like Sucher and Klotz also believe that the pandemic, by bringing us face-to-face with our own mortality, has prompted a reckoning with how we balance work and life.
“There was overall sense of malaise that came from the experience of working, almost regardless of who you were working for during the pandemic,” Sucher said.
“You want a place that takes care of you and recognizes you as a human being.”
With labor market conditions seemingly turning in favor of workers, it is possible that there will better opportunities available, at least for some. Klotz has been careful to note that quitting a job is ultimately a deeply personal decision.
“What I don’t want is for people to see all this coverage of the Great Resignation and think, oh, this is a good time to put my job.”
Whether or not it is the right decision will still depend on a myriad of personal and particular considerations.
Dr Valerie Wilson, the director of Economic Policy Institute’s Program on Race, Ethnicity and the Economy (Pree), warned against treating any one month’s report with too much importance, “The caveat is that subsequent revisions or updates to the numbers could always change what that story is. We always know more in retrospect than we do in any at any single point.”
Despite the White House’s positivity, what has remained consistently evident is the disparate impact of the pandemic on different groups of people. There continues to be marked differences how long it is taking for everyone but white men to return to their pre-pandemic rates of unemployment.
Race and gender groups that are recovering quickly
Race and gender groups that are recovering slowly
These differences, of course, have been entrenched throughout US history. In particular, Wilson is concerned with “occupational segregation”, which has historically meant that Black and brown workers are disproportionately represented in some industries and not others.
“For example, we know that women – women of color in particular – are more likely to be in low-wage service and those industries are hit extremely hard during a recession,” she said.
Industries, such as leisure and hospitality, continue to falter in regaining their pre-pandemic rates of unemployment.