By Jill Schlesinger
The Great Resignation is so 2021. This year, we should replace that term with a new one, according to LinkedIn Principal Economist, Guy Berger. With millions of Americans quitting their jobs since last summer, it’s easy to understand why we all hopped on the Great Resignation bandwagon.
Before we get to the replacement term, a little primer: the report on which economists declare that the number of resignations is at an “all-time record” is called the Job Openings and Labor Turnover Survey (JOLTS). The survey began in 2001 and as such, it captures the past two decades, but not seismic events in the labor force like the Depression and World War II. That said, as the labor market has recovered, millions of workers have quit their jobs voluntarily amid millions job openings. Did most tell their bosses to take their jobs and shove it? Sure, but that does not mean that they are never going to work again. Berger contends that workers are switching jobs, not eating bonbons on their couches, which means that the Great Reshuffle.
Employees at all earnings levels have been seeking higher pay, flexibility, and work-life balance. As postings became plentiful and labor shortages pinched various industries of the economy, a slew of Americans realized that they could seek better opportunities if their needs weren’t satisfied.
For example, those who were furloughed or worried about being exposed to a front-line job in leisure and hospitality found that they could land jobs in ware-housing and transportation. By doing so, they could lock in higher pay, benefits, and a more consistent schedule. The shift amounted to a massive change in each sector’s workforce, according to the Bureau of Labor Statistics. From February 2020, the pre-COVID peak, through the end of 2021, employment in leisure and hospitality dropped by 1.2 million and during the same time frame, employment in transportation and warehousing was up by 218,000.
The trend of moving from one sector to another suggests that the labor market is experiencing a reshuffle, rather than a flat-out resignation. Berger noted that in trying to find workers, those sectors most deeply impacted by the COVID recession have been forced to right-size pre-pandemic low wages to entice eligible workers to fill open positions. He noted that pay growth in leisure and hospitality is up 16% from a year ago, more than twice the pace of inflation, while ware-housing pay growth is up 8% annually. Knowing that there are www.jillonmoney.com. Sample jobs for higher pay may help explain why so many people are able to quit freely. “It is not a coincidence that hires, quits and wage growth are extremely elevated right now,” explained Berger, “this is all part of the Great Reshuffle.”
In addition to transitions among sectors, Berger said that the pre-COVID trend of Baby Boomer retirement has added to the Great Reshuffle. The Federal Reserve Bank of St. Louis found that “there were slightly over 2.4 million excess retirements due to COVID-19 by August 2021, but Berger contends that it is not yet clear whether older workers who left amid COVID and its variants are done for good, or whether they might rejoin the labor force. Research from the Center for Retirement Research at Boston College suggests that there has been “only a small increase” in workers claiming Social Security retirement benefits, so there many older workers could find their way back to work as COVID retreats.
Berger notes that we are still in the early stages of understanding the Great Reshuffle and its lasting impact, so it would behoove us to be open to the story changing over the next months and even years..
Jill Schlesinger, CFP, is a CBS News business analyst. A former options trader and CIO of an investment advisory firm, she welcomes questions at askjill@jillonmoney.com. Check her website at www.jillonmoney.com.
