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Friday, October 07, 2022

For the second month in a row, Americans are leaving work at a record pace

WASHINGTON (AP) – Americans are leaving jobs at a record rate for the second straight month in September, in many cases due to pay increases elsewhere as companies increase wages to fill vacancies that are close to record levels.

The Labor Department said Friday that 4.4 million people quit their jobs in September, or about 3% of the country’s workforce. This is up from 4.3 million in August and well above the pre-pandemic level of 3.6 million. There were 10.4 million vacancies opened, up from 10.6 million in August, which were revised upward.

READ MORE: How the pandemic affected the economy: from empty shelves to higher prices

The numbers point to a historic level of labor market turmoil, with new workers leaving jobs, often because of higher wages or better working conditions. Incomes are rising, Americans are spending more, the economy is growing, and employers have increased recruiting to keep up. Rising inflation, however, is offsetting much of the increase in workers’ wages.

Friday’s report follows last week’s jobs report, which showed employers increased their recruitment in October, adding 531,000 jobs, and the unemployment rate fell to 4.6% from 4.8%. Hiring has rebounded as the Delta wave that held back job growth in August and September faded.

This is usually taken as a signal of employee confidence when people leave the job they are holding. The vast majority of people are leaving for a new position.

The number of available jobs exceeded 10 million for four consecutive months. The record before the pandemic was 7.5 million. More jobs were opened in September than 7.7 million unemployed, reflecting the difficulties many companies face in finding workers.

In addition to the number of unemployed, the number of people looking for work is about 5 million fewer compared to trends before the pandemic, making it much more difficult to hire employers. Economists cite a variety of reasons for this decline: some mothers cannot find or afford childcare, while others avoid work for fear of contracting COVID-19. Incentive checks this year and in 2020, as well as additional unemployment assistance that has expired, have given some families more savings and allowed them to give up looking for work.

Quit smoking has been particularly dramatic in industries that mainly consist of personal services, such as restaurants, hotels and retail, as well as in factories where people work in close proximity. This suggests that at least some people are quitting smoking due to fear of COVID-19 and possibly quitting their jobs.

Goldman Sachs, in a policy brief on Thursday, estimates that most of the 5 million are elderly Americans who have decided to retire. Only about 1.7 million people between the ages of 25 and 54 are what economists consider the best year of work.

Goldman estimates that most of these people will return to work in their prime years in the coming months, but that there will be far less workforce left than before the pandemic. As a result, employers can face labor shortages for months or even years.

READ MORE: Why millions of Americans think they have to choose between caring for loved ones and working

Companies in other countries face similar challenges, resulting in higher wages and higher inflation in countries such as Canada and the UK.

Competition for American workers is fierce for retailers and delivery companies, especially when they are recruiting employees for what is expected to be a healthy winter holiday shopping season.

Internet giant Amazon employs 125,000 regular drivers and warehouse workers and offers wages ranging from $ 18 to $ 22 an hour. It also pays out login bonuses up to $ 3,000.

Seasonal hiring is also on the rise. UPS, a parcel delivery company, is looking to add 100,000 employees to help with large holiday orders and plans to make job offers to selected job seekers within 30 minutes.

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