As the Economy Grows, More Americans are Quitting Their Jobs

Home » Money Management » Economic News » As the Economy Grows, More Americans are Quitting Their Jobs

As the Economy Grows, More Americans are Quitting Their Jobs

With the U.S. economy steadily adding jobs and some employers even struggling to attract skilled workers to fill positions, a related phenomenon is on the rise: people are quitting their jobs. In fact, as The Wall Street Journal reports, voluntary terminations are nearing their highest point since 2001. Moreover, in many cases, those resigning employees are finding higher paying jobs.

According to Labor Department data, 3.4 million U.S. workers chose to quit their jobs in April (another 1.7 million were laid off during the month). Amounting to 2.27% of total employment, that figure is the highest since July of 2001. Additionally those who were voluntarily unemployed accounted for more than 13% of jobless Americans in May — another 17-year high.

Not only does this trend underscore the confidence workers have in the economy but could also serve to spur wage growth. That’s because, according to data from the Federal Reserve Bank of Atlanta, those who switched jobs were found to make 30% more than those who remained in their positions for the past 12 months.

As mentioned, the job-hopping trend is emerging at a time when a reported 90% of businesses are hiring. This is also driving wage growth as business owners are increasing salaries in order to attract top talent. For example Dave Pavelka of Denver-based Kenny Electric told WSJ he’s been luring inexperienced workers to fill necessary positions by offering strong starting salaries and opportunity for advancement. He said, “I think the number-one driving force is the compensation part of it. Not just the entry level, but the potential for expansion, to grow.” Similarly Derek Volk of Volk Packaging Corp. told the Journal that, in addition to raising wages by 5%, the worker shortage has led him to be more open to special requests, such as an employee that asked for a later shift start. Volk explained to the publication, “A few years ago, that would have been a ridiculous ask, but now you have to be flexible.”

Just as we’ve seen the growing economy lead to an increase in consumer confidence, we’re now witnessing workers gaining the confidence to leave their current positions in search of better pay, more flexibility, and new challenges. As a result, the wage increase that’s already begun due to work shortages seems poised to rise in the coming months and perhaps beyond. Overall that’s great news for American consumers and the economy at large but a potential challenge that several business owners will surely be facing head-on.

Comments

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

France and Germany Move to Block Facebook's Libra

When Facebook first unveiled official plans for the cryptocurrency Libra, there was certainly excitement from some circles. Unfortunately regulators haven't been quite as thrilled, with many jurisdictions sharing their concerns and questions. Now two European countries are taking things one step further, announcing that they'll move to block the digital...

Square's Cash App Reportedly Looking to Offer Stock Trading

Among many small business owners and patrons, Square is known for their point of sale interface and — before that — their card readers that allowed smartphones to become cash registers. While those are still cored products, the company has frequently expanded into other areas of FinTech. This includes their...

Dow, S&P 500 Rebound to Near Record Highs

For investors, August 2019 proved to be a roller coaster of a month. Following several erratic swings, both the Dow Jones Industrial Average and S&P 500 closed down from where they began on August 1, making for the second-worst month so far this year. With history suggesting that September is...