New York (Trends Wide Business) – A record number of 4.3 million people quit their jobs in August, demonstrating the considerable advantage workers have in today’s economy.
About 2.9% of the workforce quit in August, up from 2.7% in July, according to the Job Openings and Labor Turnover Survey (JOLTS) report, released Tuesday. This is the highest resignation rate since the report began in late 2000.
The number of workers who quit increased by 242,000 from July, as more Americans demand higher pay, better working conditions and more flexible work arrangements. The number of people who quit increased in food and lodging services, wholesale trade, and state and local education.
“If you’re unhappy with your job or want a raise, in today’s environment it’s pretty easy to find a new one,” said Gus Faucher, chief economist at PNC. “We are seeing that people are expressing their will.”
Businesses continue to grapple with a severe shortage of workers. Job offers remained very high at the end of August, at 10.4 million, according to the JOLTS report. However, this figure represents a decrease of 659,000 jobs compared to the end of July.
Figures show that the worker shortage was even worse than previously thought this summer. The number of job vacancies in July was revised up to 11.1 million, a record since this report began in 2000.
A “golden age” for workers
Joe Brusuelas, RSM’s chief economist, said we could witness the beginning of the “golden age of the American worker.”
“The American worker is now confident that he has bargaining power and can get a reasonable salary, in addition to influencing working conditions,” Brusuelas said.
That bargaining power comes from your willingness to quit jobs you don’t like and find new ones. And this shift isn’t just about the economy, but about a broader reassessment around quality of life and purpose.
“This is what happens after the great wars or depressions,” Brusuelas said. “It is difficult to detect when you are in it, but we have been through a shock that caused an unexpected change in the population. And it will take some time to assimilate.”
All of this helps explain why employers, including factories, trucking companies, restaurants, construction companies, and schools, are having trouble finding workers.
In the long term, this transformation of the workforce will be positive, allowing more people to find fulfillment in their careers and companies having happier employees. And it can allow more workers to earn a living wage and contribute to the broader economy, alleviating the alarming gap between rich and poor.
In the short term, however, worker shortages will continue to complicate the reopening of the global economy, contributing to rising prices, supply chain tension, product shortages and shipping delays.
“It takes a while for these things to sort themselves out,” said PNC’s Faucher.