Recession fears are on the rise. Why do people still leave their jobs?

Interest rates are rising, inflation is at a four-decade high, the economy appears to be slowing and experts fear a recession is on the way. But Americans are still leaving their jobs at near-record rates in the face of growing economic uncertainty.

The percentage of American workers who left their jobs hit a record earlier this year and fell only slightly as the economy slowed after two years of volatile growth. After the smoking cessation rate reached 2.9 percent this spring, the smoking cessation rate fell to 2.7 percent in July, according to data released by the Department of Labor on Tuesday.

The idea of ​​leaving a job amid a period of rising costs of living and a questionable economic future may seem counterintuitive. But the labor market has remained stacked in favor of workers, who see ample opportunities to increase their profits to replace the rising costs brought on by inflation.

“Despite recent declines, job vacancies still outnumber the unemployed by a significant margin, illustrating just how tight the labor market is,” Anne Elizabeth Kunkel, an economist at Indeed Hiring Lab, wrote in Monday’s analysis.

Almost every unemployed American has two jobs open, according to Department of Labor data, giving job seekers ample opportunities to find new jobs with better pay or working conditions. Companies are still scrambling to find enough workers to keep up with consumer spending – which is well above pre-pandemic levels – from a workforce still smaller than it was before COVID-19.

“It seems possible that employer demand will need to cool off significantly before recruiters begin to notice easing in hiring conditions,” Konkel wrote.

In other words, employers still have too many open jobs and not enough candidates to avoid pay increases and other perks of finding talent. This means that workers still have a huge incentive to quit for a better paying job, especially as inflation continues to rise.

Konkel explained that job seekers on Indeed.com are looking for higher wages than ever before. The number of users looking for jobs at $20 an hour was higher than those seeking $15 an hour in June 2022, and the number of job seekers looking for $25 an hour increased 122 percent over the past 12 months.

Konkel attributed the surge in job seekers looking for more money to the steady increase in advertised wages and the inflation they helped feed.

Once job seekers know that a higher wage is possible, their expectations may change and act as a pull factor in their search for a higher dollar amount. In this case, Kunkel explained, the shift in job seekers’ expectations from looking for $15 to $20 instead is obvious.

“On the other hand, inflation continues to wipe out workers’ salaries,” she continued, noting that only 46 percent of workers saw wage gains that outpaced inflation.

Pressure to quit for a higher paying job has been higher in the private sector, where 3.5 percent of the workforce left their current employer in July. Workers in industries with historically low wages, difficult working conditions, and limited telecommuting options are driving these fees.

The leisure and hospitality sector recorded a 6.1 percent quit rate in July, down sharply from 6.9 percent a year ago, but still double the national quit rate.

Restaurants and bars in particular have struggled to return to their pre-pandemic employment levels despite rapidly raising wages. The pressure has also made it nearly impossible for these companies to fire or lay off employees, even amid typical season turnover.

“Hospitality companies tell us that what was once the ‘one strike, you’re out’ rule for employees who failed to show up to work without notice is now more like the ‘ten strikes, you’re out’ rule,” said Julia Pollack, chief economist at ZipRecruiter. They can lay off workers because they can’t replace them.”

“The decline in layoffs in industries like hospitality has been so significant, it has more than offset the increase in layoffs in the technology sector,” she explained.

Layoffs also remained high in the retail sector (4 percent) and the transportation and warehousing sectors (3.5 percent), with both sectors facing threats from lower spending on goods and higher interest rates.

However, there are some signs of workers’ confidence waning, which could lead to a decline in smoking cessation.

Pollack said the ZipRecruiter job seeker confidence index fell 4.5 points in August to an all-time low of 97.8, with more applicants looking for job security over higher wages.

Since the pandemic, job seekers have been looking for higher salaries, less stress, and more flexibility. In August, Pollack said, job security rose to number two in their priority order.

One in four job seekers say they feel less secure about their current job than they did six months ago. The rising risk of a recession, combined with a recent wave of tech layoffs, has made employees more concerned about the fragility of their jobs.”

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