Americans quit their jobs in record numbers ahead of the holidays, with an all-time monthly high of 4.5 million people handing in their resignations in November, according to newly released government data.
That figure surpasses the previous high reached in September, whentheir jobs. Leisure and hospitality companies, such as restaurants, bars and hotels, saw the greatest number of employee exits, with more than 1 million workers quitting in November alone, the U.S. Department of Labor said on Tuesday. That represents an increase of 60% for the industry, a major employment sector, compared with a year earlier.
The data suggests that the "Great Resignation," as some experts have labeled the trend, continues apace amid an extremely tight labor market. With workers in high demand, bosses are raising wages and dangling incentives such as hiring bonuses. That is providing opportunities for many employees to quit lower-paying jobs in favor of more lucrative work.
The so-called "quits" rate in November is "really big, absolutely and relatively," Liz Wilke, chief economist at payroll services company Gusto, told CBS MoneyWatch. "It's a reflection of the momentum of the economy and the recovery."
Gusto's data suggests the quits rate will remain high, as its clients reported the same percentage of workers quitting in December as in November. Much of the turnover is occurring in lower-paying industries where employees are jumping to new roles to find higher pay, more flexibility and better benefits, Wilke noted.
Even as 4.5 million people quit, businesses hired 6.7 million workers, tweeted Heidi Shierholz, the former chief economist at the Labor Department and now president of Economic Policy Institute, a left-leaning think tank.
"People who quit are taking other jobs, not leaving the workforce," Shierholz noted. "Workers being able to quit their jobs to take better jobs is a very good thing and signals an economy with healthy dynamism."
Quitting to go out on their own
Some Americans also may be stepping back from their jobs to start their own businesses or due to COVID-related issues, such as the challenge of juggling work and childcare as infections around the U.S. top 1 million cases per day. About 4.3 million people became entrepreneurs last year, Wilke noted.
The worker shortage isn't likely to relent anytime soon due to demographic issues on top of the pandemic, according to Emsi Burning Glass.
"With the surge in Baby Boomer retirement, declines in labor force participation amongst millennials, ebbing birth rates and falling immigration numbers, don't expect the labor shortage to be completely solved in the New Year," said Ron Hetrick, senior economist at Emsi Burning Glass, in an email before the data was released.
Between January 2020 and October 2021, 3.3 million Americans opted to retire, according to new data from the St. Louis Federal Reserve Bank — many more than normal demographic trends had predicted.
At the same time, employers posted fewer job openings, which declined to 10.6 million in November from about 11 million in the prior month, the Labor Department numbers show. Several industries saw a decline in job openings, including accommodation and food services, where new job postings fell by about 260,000, the BLS said.
To be sure, the November data marks labor-market trends before the rise of the Omicron variant. The sharp rise in COVID-19 cases in December and January may create new headwinds for the labor market.
"The surge in infections is already weighing on demand in high-contact service sectors, but the bigger impact of the Omicron wave will be on labor supply, as workers testing positive are forced to isolate," Michael Pearce, senior U.S. economist with Capital Economics, said in a report.
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