{"id":28239,"date":"2022-01-11T02:43:42","date_gmt":"2022-01-11T02:43:42","guid":{"rendered":"https:\/\/www.lifeandnews.com\/articles\/?p=28239"},"modified":"2022-01-12T23:37:50","modified_gmt":"2022-01-12T23:37:50","slug":"the-great-resignation-historical-data-and-a-deeper-analysis-show-its-not-as-great-as-screaming-headlines-suggest","status":"publish","type":"post","link":"https:\/\/www.lifeandnews.com\/articles\/the-great-resignation-historical-data-and-a-deeper-analysis-show-its-not-as-great-as-screaming-headlines-suggest\/","title":{"rendered":"The Great Resignation: Historical data and a deeper analysis show it\u2019s not as great as screaming headlines\u00a0suggest"},"content":{"rendered":"\n

Jay L. Zagorsky<\/a>, Boston University<\/a><\/em><\/span><\/p>\n

The so-called Great Resignation was one of the top stories of 2021<\/a> as \u201crecord\u201d numbers of workers reportedly quit their jobs. <\/p>\n

The latest figures<\/a> came out on Jan. 4, 2022, and showed that 4.5 million people voluntarily left their positions in November \u2013 an \u201call-time high<\/a>,\u201d according to the agency responsible for collecting the data. That\u2019s 3% of the nonfarm workforce, which headlines<\/a> also proclaimed a record<\/a> level. <\/p>\n

But is it? <\/p>\n

The \u201cquit rate\u201d interests me<\/a> because I wrote my economics doctoral thesis on how people find work<\/a>. Since then I have been fascinated by how people leave jobs and then find new ones.<\/p>\n

Tracking \u2018quits\u2019<\/h2>\n

Data on people quitting comes from the Bureau of Labor Statistics<\/a>.<\/p>\n

Each month the bureau runs the Job Openings and Labor Turnover Survey, also known as JOLTS<\/a>. The bureau interviews about 20,000 businesses and government agencies each month, which it uses to estimate several aspects of the workforce, including the number of people who quit, retired, got hired or got fired.<\/p>\n

Since April 2021, the share of nonfarm workers who quit their jobs has been at some of the highest levels<\/a> recorded by the bureau. In all, nearly 33 million people<\/a> left their positions over this period, or over a fifth of the total U.S. workforce<\/a>. <\/p>\n

Certainly, that\u2019s a lot of people. But a closer look at all the historical data we have can help put this in some perspective. <\/p>\n

One issue is calling the current levels a \u201crecord.\u201d The problem is the data only goes back a little over two decades, which means it\u2019s certainly possible that the rate could have been higher at several points in the past. We just don\u2019t know. <\/p>\n

For example, during the dot-com bubble in the late 1990s and early 2000s, the U.S. economy was strong<\/a>, which created many new jobs and opportunities for workers. These are typical precursors<\/a> to more people quitting their current jobs in search of better pay<\/a> and benefits. Given that the rate was 2.4% in January 2001 \u2013 a month after the quits data begins \u2013 it\u2019s not a stretch to imagine it may have been higher than the current level at some point in 2000 or earlier. <\/p>\n

Or another time when quits may have been higher was after World War II, when the postwar American economy was booming<\/a> and the economy was in great flux.<\/p>\n

In fact, some data pre-2000 does exist that suggests there are times when the quit rate may have been higher. The Bureau of Labor Statistics tracked the quit rate in the manufacturing sector<\/a> from 1930 to 1979, when it ended the survey because the industry \u2013 which at one time made up as much as 28% of the economy<\/a> \u2013 became less important<\/a>.<\/p>\n

Manufacturing workers, who make things like steel, cars and textiles, were quitting their jobs at a monthly average rate of 6.1%<\/a> in 1945, compared with the 2.3% recorded for the sector in November 2021<\/a>. <\/p>\n

Since about a third of the U.S. workforce had manufacturing jobs<\/a> in the late 1940s, this suggests the overall quit rate was likely higher back then.<\/p>\n

Putting quits into perspective<\/h2>\n

A lot of stories have also focused on the absolute number of workers who quit their jobs, such as 4.5 million who quit in November \u2013 on a seasonally adjusted basis.<\/p>\n

If quits for December 2021 are similar to November, I expect about 47 million people will have voluntarily left their jobs in all of 2021. That would mean about 33% of the total nonfarm workforce quit jobs last year. <\/p>\n

Again, that seems like a lot, but a huge swath of the labor force does this every year. In 2019, for example, about 28% of the U.S. workforce<\/a> quit.<\/p>\n

So is quitting higher than normal? For sure. But off the charts enough to earn the moniker of \u201cgreat\u201d? I don\u2019t think so.<\/p>\n

Not all sectors are seeing a wave of quitting<\/h2>\n

Workers also aren\u2019t quitting in droves across all sectors of the economy. While quits are higher than usual in most industries, a few sectors are responsible for most of the turnover, with some lower than their recent peaks.<\/p>\n

The highest quit rate<\/a> is in accommodation and food services. About 6.9% of people working in hotels, motels, restaurants and bars gave notice in November. While that\u2019s the highest since 2000, voluntary turnover in this sector is usually on the high side<\/a> \u2013 given the nature of the work \u2013 and has been above 5% many times over the past two decades. <\/p>\n

November\u2019s second-highest quit rate, at 4.4%, was retail trade<\/a>, which includes workers in stores and shops. Combined, these two relatively low-wage industries accounted for one third of all people who quit that month.<\/p>\n

On the other hand, the quit rates for construction<\/a>, information<\/a>, finance and insurance<\/a> and real estate<\/a> are relatively low and have been higher in the past 21 years. <\/p>\n