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

Ameritrade Survey Finds Many Investors Lack Knowledge of Retirement Accounts

How much do you know about your retirement accounts? Even if you contribute to an employer-sponsored 401(k) or even a traditional IRA, chances are you still might not be familiar with all of the rules, requirements, or fees that come with them. To prove this point, recently Ameritrade interviewed 1,006...

Become a Successful Solopreneur With These Essential Tools

Has there ever been a better time to be an entrepreneur? Between the strong economy, a growing number of sales outlets, and “side hustle” culture abounding, it’s really no wonder that small business optimism reached record levels last year. Speaking of side hustles, a recent development is the the rise...

Federal Reserve Seems Unlikely to Raise Rate This Year

Over the past year, one recurring economic story has revolved around the Federal Reserve. That’s because the central banking system spent 2018 slowly raising interest rates from their historically low levels — much to the dismay of the President. Although that trend was expected to extend into this year, it...