The Great Resignation: An Ongoing Shift in the Job Market

It’s hard to ignore the fact that the pandemic has significantly altered the landscape of work. Not only have the types of available jobs shifted, but people’s preferences and capabilities regarding work have changed dramatically. For instance, there are currently around 10 million job openings, yet over 8.4 million unemployed individuals are still on the hunt for work.

According to the latest report from the Labor Department on job openings and labor turnover (JOLT), there were approximately 10.4 million job openings by the end of August, a slight decline from the record 10.9 million in July. Nevertheless, this figure still surpasses the previous high of 10.1 million in June. To put it simply, employers are eager to hire, but they’re finding it challenging to reinstate positions lost during the pandemic—a troubling sign when the labor market was already struggling to recover.

What’s Really Happening?

Let’s not forget that we are still navigating through a pandemic. Although COVID-19 hospitalization rates have dropped by 64% since their peak in January, it’s essential to remember that this decline occurred before vaccines became widely accessible. The surge in Delta variant cases, which now constitutes over 99% of new infections, continues to affect the labor market, posing threats of renewed business shutdowns for establishments that have only recently reopened.

As a side note: If you haven’t received your COVID vaccine yet, please consider doing so before flu season arrives. It’s tough to feel sympathy for those who remain unvaccinated, especially since unvaccinated individuals are five times more likely to contract the virus, ten times more likely to require hospitalization, and eleven times more likely to die from it.

Additionally, persistent challenges like child care shortages are impacting the labor supply. Many schools, after-school programs, and daycare facilities are either still closed, temporarily shut down due to outbreaks, or operating at reduced capacity due to COVID restrictions. This leaves many potential employees unable to work because they need someone to care for their children.

Moreover, Jim Thompson, the president of the Federal Reserve Bank, recently noted that “the jobs are there, but workers may not be interested in those positions right now.” He pointed out that thanks to stimulus checks and historically high savings, many households are financially secure. However, despite the imminent end of unemployment benefits from pandemic relief, there has yet to be a significant push for individuals to return to work.

Are Workers Refusing to Accept Poor Job Conditions?

Some media outlets may portray the situation as a mystery, with various stakeholders perplexed by the reluctance of individuals to return to undesirable jobs. However, it’s worth considering that, given the abundance of job openings, many people may be unwilling to accept positions in industries known for poor work-life balance, lack of appreciation, and customer abuse.

In August 2021, the quit rate reached an all-time high of 2.9%, with particularly high rates in leisure and hospitality (6.2%) and trade, transportation, and utilities (3.7%). Over half a million health care workers left their positions that month, up from 404,000 the previous year. Similarly, nearly 892,000 workers in accommodation and food services quit, an increase from 735,000 in July.

Given the widespread burnout among healthcare professionals and the public’s refusal to follow safety guidelines, it’s no surprise that many are leaving the field. Furthermore, with over 70% of female restaurant workers reporting sexual harassment on the job, it’s understandable that the quit rate in that sector was a staggering 7%.

It’s hardly shocking that people are no longer willing to endure terrible working conditions.

What Can Be Done?

While I’m no economist or labor expert, perhaps it’s time for employers to consider offering living wages, comprehensive healthcare, retirement benefits, and strong worker protections. If companies made these changes, it’s likely they would see an increase in job applications.

If you hold a position of power in hiring, it may be worth reflecting on why you’re experiencing a staffing shortage. Without significant labor reforms, it may be impossible to compel individuals to take up jobs they perceive as abusive.

This article was originally published on Oct. 22, 2021.

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Summary:

The ongoing Great Resignation has revealed a significant disconnect between job openings and the willingness of workers to fill these positions, largely due to poor working conditions and a desire for better work-life balance. As the labor market continues to grapple with the effects of the pandemic, employers may need to rethink their compensation and working conditions to attract talent.