Record Numbers of People Quitting Jobs But Employment Remains High

Economic Policy Brief #133 | By: Rosalind Gottfried | January 6, 2021

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Policy Summary

The number of people quitting or switching jobs reached a record high of 4.5 million in November, the fourth episode of record setting in 2021.  As seen in previous assessments, the biggest changes are in lower paying occupations such as restaurant/bar and retail staffs.  Wages increased 12% in leisure and hospitality over the past year.  This indicates that employers in those lower businesses need to make their jobs more attractive or they will suffer the labor shortages that many owners and consumers are complaining about.  There are 10.6 million jobs to fill.  Pre-pandemic there were 2.4 unemployed people for every job.  Extending another trend seen earlier in the year, the workers switching jobs are getting better pay raises than those staying in their jobs. 

Data show that 3% of the labor force left their jobs in November; the figure was 6.1% in the hospitality industry.  Total hires for the month were 6.7 million, reflecting similar increases in recent months.  Unemployment claims were down for the week ending Nov 22, marking the lowest level of claims since 1969.  The number of workers increased by 1.1 million in November and the number of people not looking for work or not working fell by 473,000.  The percentage of working persons 25-54, the prime work years, increased by.5% to78.8 moving  towards the level of 80.4 level in the pre-pandemic months, a figure expected to recur early in this year.  In considering all adults, the percentage of workers was 61.8% in November, down from the 63.3% pre-pandemic level.  It is unclear what portion of this demographic may have taken early retirement.   

Policy Analysis

It is clear that low wages workers have gained leverage in demanding better wages and benefits; some report salary increases of up to $5 an hour though it is essential to note that these workers represent some of the most exploited members of the labor force.  There is some speculation that increased wages and benefits will not be as important as the nature of the corporate culture for some of the people considering a job move.  However, there have been reports that show that the sharp rise in inflation is hurting many workers whose incomes are not keeping up with the swelling cost of living.   

The consumer price index rose by 6.8% in November while average hourly earnings increased by 4.8%. Only 17% of workers had raises matching the inflation rate.  Nine in 10 persons surveyed say that they are somewhat or very concerned about inflation and these responses cut across political lines. 


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 Consumer confidence is at a five-year low and only 21% reported that their finances were better than a year ago, down from 26% in the previous annual survey.  It seems that if the businesses in the service industries want to avoid consumer attrition, and potential business failure, they will have to manage to lure workers with living wages and attractive working conditions.

Engagement Resources​

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More quit jobs than ever, but most turnover is in low-wage work.

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