The job market enters a new phase as the Great Resignation ends
Los Angeles CNN —
As the dust begins to settle on the Covid-fueled economic tumult of the last few years, one pandemic-era trend appears to be on its way out: The Great Resignation.
Almost 50 million people quit their job in the two years following the worst of the pandemic, citing pressures such as burnout, general job dissatisfaction, or child care or elder care needs. Amid a tight labor market, many were also able to find a better job, with better pay.
The trend was so prevalent that Beyoncé even released a song about it.
Now, experts say the phenomenon is finished. Ten straight interest rate hikes by the Federal Reserve, slowing wage growth, stubborn inflation and mass layoffs in some industries may be causing Americans to stay put.
“The great resignation, by really any measure, is over,” said Nicholas Bloom, a professor of economics at Stanford University who studies labor economics. The combination of a tight labor market and structural change from the pandemic catalyzed job reshuffling over the past three years, he said. “But that’s moved into the window of history now.”
Data from the Bureau of Labor Statistics bolsters Bloom’s observation: The number of people quitting their jobs fell by 49,000 in April compared to March, according to the most recent numbers available from the Job Openings and Labor Turnover Survey.
In fact, the so-called “quits” rate has steadily declined since last spring and is now virtually identical (just 0.1% above) the pre-pandemic rate in February 2020. Essentially, quits are back to the 2019 pre-Covid average.
End of an era
Most employers are no longer concerned about a rise in worker resignations, Bloom said. “It’s a topic I’ve not discussed or heard about in at least six months.”
The Great Resignation had clear benefits for workers, since wages went up and benefits improved across many industries, said Nick Bunker, the director of economic research at job listings site Indeed.
In 2021, 47.7 million people voluntarily left their jobs, according to the BLS. That was the largest number since it began compiling annual statistics in 2001. By the end of 2022, an additional 50.5 million workers had quit.
Wage growth shot up in 2021, peaking in August 2022. However, according to the most recent data from the Federal Reserve Bank of Atlanta, wage growth remains elevated: wages grew 6% on an annualized basis in May 2023, compared to May 2022.
In the most recent consumer confidence survey from the Conference Board, 43.5% of consumers said they believe jobs are “plentiful.” That’s down 4% from just one month earlier.
A ‘fearful narrative’
‘Help Wanted’ signs are not being taken down just yet. The BLS shows the rate of job growth is up in the construction, manufacturing, health, education and food services industries. Despite the apparent end of the Great Resignation, the job market continues to hum along; the US economy added 339,000 jobs in May.
But a seemingly endless parade of mass layoffs among high-profile companies has created a skittishness, particularly among white-collar workers, said Jessica Kriegel, a workplace culture expert.
Alphabet, Meta, Amazon and 3M have all significantly trimmed staff, there have been bankruptcies among well-known companies like Bed Bath & Beyond, David’s Bridal and Tupperware, plus staff cuts at some Wall Street firms and closures at regional banks. The pace of these announcements has slowed in recent weeks, but were non-stop in December through April.
“That all plays into a fearful narrative that employees buy into. The fact that quit rates are down indicates that there’s low confidence in the job market,” Kriegel said.
HR, marketing jobs more scarce
Specific sectors are seeing significantly fewer new job postings, including software engineering, human resources, and marketing roles. Overall, job postings at Indeed are down 16% year over year, according to Bunker.
“There’s definitely a broad-based pullback, but there’s been a much sharper pullback for positions that tend to be more traditional office jobs and jobs that have been more likely to be remote for the last few years,” Bunker said.
But Bloom at Stanford noted that, while the labor market has significantly slowed in many white-collar industries, other sectors are still looking for workers. “If you walk around the shopping mall, you can see help wanted signs in every shop and food place. It’s hard to fill those positions.”
Disengaged workers
Workers may not be throwing in the towel with quite so much enthusiasm these days, but that doesn’t mean they are staying at work because they enjoy it.
According to a new Gallup poll released Tuesday, 59% of workers are “quiet quitting,” meaning that they are not engaged with their job; and 18% are “loud quitting,” or actively disengaged (but still employed).
A separate survey released Tuesday from the Bank of America and Georgetown University showed that 68% of young adults “view their work mainly as a way to make a living,” and not as a major part of their identity or personal fulfillment.
Source: CNN
