The numbers of Americans leaving the workforce just hit an all-time record in August, according to Department of Labor data released recently.
An estimated 4.3 million workers left their jobs in August, even higher than the 4 million who quit the month before. This marks the highest number seen in two decades when the United States started keeping records of the statistic. The number of people who just quit the workforce in August is equal to almost 3% of the country’s total workforce.
While job openings also remain at staggering highs, the number of listings in August sat at just over 10.4 million, slumping behind the peak of 11 million job openings from the previous month, marking the first time that the rate started to decline since the beginning of the year.
Quit rates were seen most keenly amongst food services, which took losses of 6.8%, additionally, the hospitality and leisure industry also took a hit of 6.4% and the retail industry shrank by 4.7% in terms of labor force just last month.
These quit rates represent individuals who voluntarily terminated their employment and includes those who left under the expectation that they will be able to find another, better paying job in the tight labor market.
Bankrate’s senior economic analyst, Greg McBride explained that the labor market upset is driven by a “desire for flexibility… either hours worked or… [wishing to] work remotely,” and added that these factors are being given “higher priority over… compensation.”
Another factor which explains the quit rates is the latest COVID-19 delta variant which reached new highs in August and only started declining in mid-September. But other factors are at play also, such as demand.
Indeed Hiring’s director of research, Nick Bunker said that the slow employment growth seen in the U.S. in recent months was in part a consequence of “a decline in hiring appetite,” and said that COVID cases might be a speed bump on the way to economic recovery.
Several economists and lawmakers have pointed out that government intervention in the market slowed down workforce recovery with many people receiving supercharged unemployment benefits until the already extended payments sunset last Labor Day.
Many were predicting a surge in new jobs following the cessation of the program, but the September job report was similarly dismal, with just 194,000 jobs added that month, far less than the predicted 473,000 which forecasters anticipated.
Since Biden and the Democrats were able to enact sweeping entitlement legislation, the labor market has been unstable and unwell. Trends like what’s been seen in 2021 will likely continue until a sweeping Republican victory reclaims the House and Senate in 2022.
Author: Leroy Graham