The Great Resignation is being driven entirely by this one demographic
The so-called Great Resignation has erupted in America’s consciousness, referring to the waves of people leaving the workforce and the difficulty companies are having in finding replacements.
Economists at Barclays led by Michael Gapen disagree. They say what’s going on is more of a “Great Hesitation.”
“The high quit rate is a red herring for understanding the sluggish return of workers to the U.S. labor market following the COVID-19 pandemic, in our view. Instead, the true cause is a hesitation of workers to return to the labor force, due to influences tied to the pandemic such as infection risks, infection-related illness, and a lack of affordable childcare,” these economists say.
For one, the quit rate has generally coincided with an uptrend in the hiring rate. “For now, we note that these voluntary job separations have been met with job finding by businesses, hinting that these resigners are more accurately described as switchers,” they say in a new research note.
One unique finding in the Barclays report is their demographic analysis of the labor force now as compared to February 2020. Married people living with their spouses more than account for the entire decline in participation. Of the 3 million decline in the labor force compared to February 2020, there were 3.5 million fewer married workers. There was a corresponding half million increase in the participation of workers not living with their spouse.
At the onset of the pandemic, the participation declines were almost entirely among the unmarried, but that changed by September 2020. “We think that this reflects the fact that ‘co-insurance’ from being in a dual-earner household provides greater scope for sidelined spouses to be more circumspect about re-entering the labor market. That makes other considerations, such as infection risks, pandemic-related childcare challenges, and unusually healthy balance sheets more likely to tip the scale against working,” they say.
An interesting development! Has COVID-19 caused us to re-prioritize personal and family life over non virtual economic life?
ReplyDeleteThe non-virtual economy is where the danger lies. One does not know much about the people with whom one interacts there. It is safer to work at home. It is safer to shop online. Eating out and shopping out are more risky. Traveling is risky.
Home and family are places that can be safe. You can have discussions with family and people whom you know about their safety practices.
Non-virtual economic life does tend to take us away from family life in all the many distractions out there. To the degree that we can limit our economic life to virtual activities we can center our lives more on family and friends.
Will this be a lasting effect of the pandemic?
The pandemic has caused many families to curtail their spending - even families like ours which haven't had any significant financial setbacks like layoffs. We're spending only a part of what formerly had been spent on dining out, entertainment and similar frivolities.
ReplyDeleteMy homo economicus thought here is that, during pre-pandemic times, many families were somewhere near the cusp of being able to subsist as single-paycheck families. With the incrementally increased savings brought about by the pandemic lifestyle, what formerly seemed just beyond affordability (stay-at-home wife/mom) might now seem affordable, at least for a time.
When I did baptism prep at our parish, I'd see this sort of longing among the young parents. By the time the parents were getting around to getting the baby baptized, the mother typically was coming to the end of her FMLA leave. The necessity of daycare was looming. She had been home with the baby for a few months, and dearly wished to be able to continue to do so. But FMLA is unpaid, and most employers' maternity leave benefits are pretty stingy (i.e. inadequate), so the family had been getting by on the husband's paycheck, and they had burned through whatever modest savings a young couple has been able to accumulate. In short, she didn't want to go back to work, but felt she had little or no choice.
In today's circumstances, with better savings and a more robust job market, she might feel she has a choice. Especially if she's not particularly happy in her current job.
I am speaking here about young women, but young men might have the same or similar motives.
I think you may be right, Jim. And I don't see it as a bad thing.
DeleteA lot of nurses are leaving and becoming traveling nurses at much higher salaries (I've heard 3X bandied about). I think the business folk running these operations as a business don't realize they don't have the upper hand at the moment. They alienate the workforce and then have to pay higher rates to the replacements. They can't understand why overworked nurses in the midst of a dangerous pandemic aren't satisfied with attaboys, t-shirts, trinkets and food donated by fast food companies. Maybe they should start calling them "associates".
ReplyDeleteI have never been a nurse (I would have made a lousy one) but I can't imagine working under those conditions. Just observing from the outside, they treat nurses like cogs in a machine. How to get the most work out of the fewest people. Most of the nurses I know work 12 hour shifts. That would be exhausting, and I think dangerous for the patients. How could you be at your best towards the end of one of those shifts? I am working about 7 and a half hours a day in a job which is not near as demanding as nursing, but I am not good for much else at the end of the day. Of course I am no spring chicken.
DeleteTraveling nurses may get more pay, but they wouldn't get to know their co-workers very well or have much connection with their work place. I can see how the long hours and long commutes would be a worse problem if you had young children.
The fundamental problem with the American healthcare system is that it has been taken over by corporations whose focus is almost exclusively the bottom line - making enormous profits at the expense of the patients, and at the expense of the non MD workforce. This not the case in any other OECD nation, and is the reason that America’s healthcare outcomes put us way down the country list of “ best” healthcare in spite of healthcare expenditures that average 4-6 times higher than those of other countries, a huge expense in family budgets even with employer picking up a large portion of the tab. Something like 40% of people who go to bankruptcy court are there because they can’t pay their medical bills.
DeleteSome industries should not be profit- based industries and healthcare is one of them. Capitalism is mostly a good economic system, but MUST be regulated. The European countries have struck the best balance- private sector capitalism, profit - making businesses create a good quality of life for their citizens. Add in extensive social safety nets for families, healthcare, education and retirement and their citizens enjoy a quality of life that they would never trade for America’s ruthless. libertarian style capitalism. Too few Americans have spent any significant amount of time in other countries and really don’t realize what our so- called political leaders have done to us. I hope the country survives long enough for the younger people to take over and hope they won’t succumb to the greed syndrome. They travel much more than their parents and grandparents. They see how the rest of the rich world lives. And they also travel to poor countries and many realize that the differences between the two worlds reflects terrible injustice.
We were once the envy of the world. Now Europeans look at us and wonder what happened to the US. One word answer works - greed. Greed for wealth, combined with greed for power in the political class, is destroying us.
The total of premiums, copays, and deductibles my son’s family pays is around $15,000/ year. They took more than a year of monthly payments to pay their portion of expenses for their daughters c- section birth 18 months ago be a that shot up the copay they had to cover tremendously. . This is not my silicone valley son - my son in LA hasn’t worked in a year and a half. Fortunately his wife’s job continued throughout the pandemic. The healthcare insurance is via her company, where she is the #1 account executive in the LA office. But the salaries and benefits don’t come close to those of the SV son and his wife.
Back when they were putting together Obamacare, one of my physicians who is very conservative was very candid about the problems of healthcare. They all came down to greed.
DeleteFirst the greed of the physicians who were just running up the bill with all kinds of tests and procedures.
Second the greed of the insurance companies who were brought into regulate the greed of the doctors, and then became greedy themselves.
Third, the greed of the lawyers who keep driving up doctor's insurance premiums.
On a personal note about companies having a difficult time replacing people who quit, I am working back at my old job after being retired for three years because they haven't been able to hire a replacement for the guy who quit to have adventures and find himself. A lot of young people don't want to stay in a smallish town. However, as they say, it's an inside job with no heavy lifting, and the pay is decent. We had someone hired and he was training with me for a month, and we were about to the point where I could step back and be retired again. But he gave thirty minutes notice and went to another company which offered higher pay. Where he had worked before and didn't like it because it was too stressful. Go figure.
ReplyDeleteI'll admit that I have enjoyed being back, and they have been treating me really nice because they don't want me to quit to have adventures or walk out with thirty minutes notice. It's good to know that my brain cells haven't all died in three years and I can still do the job. But I am conscious of my age and encroaching mortality and it is best that they find someone fairly soon. I don't know how presidents and popes keep working into their 80s.
Jac, Don't forget the greed of the big hospital corporations who have been snapping up hospitals, many formerly non-profit, all over the country for years now. The bottom line counts - so you get inflated costs like $10/single aspirin or bandaid. One of my sisters has had many medical problems throughout her life and has been hospitalized a number of times. At one point the hospital she had gone to several times was acquired by a profit-making corporation and she was hospitalized again. She was surprised by the deterioration in "service" - too few nurses to respond to calls quickly, trash not emptied in her room and the bathrooms, long delays in getting food, etc, etc. She didn't understand it - but then she found out the hospital had been bought by one of the big corporate chains. Most of the hospitals in the DC area are now owned by a huge corporation, corporations that are making a ton of profit. Also many doctors now own the equipment in clinics that provide xrays, MRIs, etc. and those are also huge profit-makers once the initial expense is covered.
DeleteAnne, your sister's experience mirrors what I'm hearing from members of the nursing profession. There's a lot of turnover and loss of people AFTER they become experienced. There is a lot of unhappiness and it seems to be related to the change from non-profit health care to kind of a sausage factory with lots of advertisement. I'm happy I don't have any emergency problems right now.
DeleteWe have a hybrid situation with healthcare here in that the local hospital is still independent but there are roving specialists who are part of a corporate network and are here a day or two a week. Which meant that my recent knee surgery was done by an orthopedic surgeon from Denver, but took place in the local hospital. The nurses were very kind and competent; they don't travel and work for the hospital rather than a network. So not a bad mix, there are advantages to having access to specialists, but not having everyone owned by the outside corporations.
DeleteIt's a good thing the surgery was successful because I returned to work after recovering for two weeks to a very full in-basket.
This Dr. Zubin lays out the situation well in this calm but passionate talk, I think. He's not even recommending socializing medicine, although I'd give it a look.
ReplyDeletehttps://youtu.be/C7udJn4qBYw