The Nice Resignation is being pushed totally by this one demographic
The so-called Great Resignation has broken out in America’s consciousness, referring to the waves of withdrawals and the difficulties companies have in finding a replacement.
The big question for both financial markets and policy makers is whether these workers are gone forever. Some claim this is the case, which would lead to permanently higher wages, lower profits and higher prices for consumers.
Economists at Barclays, led by Michael Gapen, disagree. They say what is going on is more of a “great hesitation”.
“From our point of view, the high termination rate is a diversionary maneuver to understand the slow return of workers to the US labor market after the COVID-19 pandemic. Rather, the real cause is the reluctance of workers to return to work due to influences related to the pandemic such as infection risks, infection-related illnesses and a lack of affordable childcare, ”say the economists.
For one, the churn rate generally coincides with an upward trend in the hiring rate. “At the moment, we are seeing that these voluntary job separations have been faced by companies with job-hunting, which suggests that these resignations are more accurately referred to as transfers,” a new research said a new research report said.
Another finding, based on the Atlanta Fed’s wage growth tracker, is that wage growth is led by job changers – almost exclusively in the 16- to 24-year-old cohort – “who are generally less skilled and less restricted” . through non-financial considerations (such as risk of infection, childcare, health insurance, and place of work) that could otherwise affect their ability to change jobs. “
A unique finding from the Barclays report is the demographic analysis of the labor force now compared to February 2020. Married people living with their spouses are more than responsible for all of the decline in labor force participation. Of the 3 million decline in the labor force compared to February 2020, there were 3.5 million fewer married workers. The participation of workers who did not live with their spouse increased accordingly by half a million.
At the beginning of the pandemic, participation declines were almost entirely among unmarried people, but that changed by September 2020, spouses who were sidelined to be more cautious 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 balance against work, ”they say.
A study of job status finds that the decline in the labor force is almost entirely concentrated in service jobs, sales, and non-commercial office and administrative positions. “Of course, these categories were also hit hard by demand-side pandemic influences, with households redirecting demand from services to goods and office workers being sidelined by teleworking. From our point of view, however, other similarities are that these professions generally require fewer skills and entail a considerable interpersonal exchange and thus imply a higher risk of infection ”, according to the economists.
The Barclays team expects most of the missing workers to return to the U.S. armed forces, albeit gradually. They point out that for many, retirement is not necessarily a permanent condition.
“Given the composition of retirees and non-participants, the higher re-entry rates of employees of non-retirement age and the unusually high participation rate of employees of the near retirement age in the run-up to the pandemic, we assume that retirement in the coming quarters will be much higher than normal fail, ”they say.