Economists believe that career shifts could lead to a healthier labour market as people gravitate to better prospects that suit their interests and skills.
James Picerno, a financial journalist and commercial counsel at financial services firm Trustly, shared an article on US workers quitting jobs for new opportunities at the highest rate in over two decades as the pandemic fades. Economists state that this could be a healthy sign of recovery for the economy and also indicates higher wages for workers, but it could be a factor for inflation as well.
While this could be an optimistic sign for professionals, it could be adding to the struggle companies are already facing as they try to keep pace with the economic recovery. The wave of resignations, which experts are calling as the take-this-job-and-shove-it risk, is in direct contrast to the pandemic days when workers were craving for job security amid a national health and economic crisis.
According the US Labour Department, approximately 2.7% of the workforce had resigned from their offices in April 2021, a jump from 1.6% a year earlier to the highest level since the pandemic days. Despite elevated unemployment rates, workers are willing to quit and move to better prospects as the shift causes employers to raise wages and offer promotions to acquire talent.
Take-this-job-and-shove-it risk: US workers quitting jobs at highest rate in over two decades. Implications: economists say it's a healthy sign of "churn" for the economy. Also a signal of higher wages–good for workers but a factor for inflation too: https://t.co/AT4iCa9nqe pic.twitter.com/4sWDvA4j1P
— James Picerno (@jpicerno) June 13, 2021
Austan Goolsbee, economist and the Robert P. Gwinn Professor of Economics at the University of Chicago’s Booth School of Business, retweeted an article on Fed officials seeing retirements shrinking the labour force as the pandemic fades in the US, thereby altering their course to reducing the purchase of bonds to eventually raising interest rates that could spur full employment.
The article explains how the Fed used February 2020 as benchmark to understand what full employment would look like today, but now realise that less job growth is required to reach full employment. Policymakers, as a result, have grown less confident in the recent weeks about the ability of the economy to recover all the jobs lost during the Covid-19 pandemic without spurring inflation.
Economists state that employers added fewer jobs than expected in April and May, amid a massive economic boom, increasing wages and other factors that pointed to a shortage of workers. Meanwhile, the unemployment rate continued to fall, to a pandemic low of 5.8%. In addition, the number of people working or willing to work was still 3.5 million less than in February 2020, while labour-force participation stood at 61.6%, down from 63.3% before the pandemic hit. The Fed believes that numerous factors related to the pandemic are holding back the labour force and will gradually fade later this year.
Fed officials had used February, 2020 as benchmark for what full employment looks like. Not any more: they see retirements shrinking the labor force, so less job growth needed to reach full employment than Feb/2020 benchmark implied, @pkwsj reports. https://t.co/Iyhv9EtU5s pic.twitter.com/PiOPqctUan
— Greg Ip (@greg_ip) June 13, 2021
Diane Lim, economist and senior advisor and director of outreach, Penn Wharton Budget Model (PWBM), shared her views on the pandemic recession and how the recovery has been both enlightening and transformative for the US economy.
As a result, not only have people learnt to combine work with the rest of their lives but have also learnt to move on from leisure and hospitality jobs which disappeared due to the pandemic. She also stated that recent trends have illustrated the unleashing of the cooped-up demand for going out with people looking for restaurants near them rather than jobs over the past few months, as restrictions were lifted and vaccinations took pace.
The economic recession by some economists have also been termed as the She-cession, implying how dramatically it impacted women workers or single working mothers who lost their jobs or were forced to cut back on market work as schools, elderly care facilities, and day care centres shut during the pandemic.
New blog post by me–kind of reflective, meditative and personal–about the #pandemic recession and how the #recovery is not likely to take us to the same place we would have been had the pandemic never happened. And why that's probably a good thing. https://t.co/7tgtdmXzwS
— Diane Lim (@economistmom) June 13, 2021