For two years John White has been trying to get a permanent job at the company where he is an entrepreneur, but his applications for positions there have been rejected five times. Company policy prohibited contractors from working remotely during the pandemic, so even while his colleagues were working from home, White was commuting to work. “I was physically in the office every day that I worked here,” White, 38, recalls.
When asked for increases, the staffing company and the client each blamed the other party. The last straw was when he asked his direct manager for a raise. According to White, she suggested that he “leave and come back under another contracting company.”
White is gone – for a competitor. Four days after that conversation, the Louisville resident presented a job offer to a competing company paying an additional $ 2 an hour, as well as paid time off and health insurance. On his last day, he brought a cake with the message “Sorry for your loss”.
White is among the millions of American workers who have quit their jobs in recent months. Even with 9.8 million people unable to find jobs, others are quitting at record rates, pushing the “quit rate” to levels never seen before.
Some workers are leaving for new jobs, with better pay or working conditions adapted to the distance. Others have decided to start their own business rather than earning a salary. Still others are giving up without a firm plan, confident they can get a better deal elsewhere as the economy rebounds from the pandemic recession.
“The dropout rate is ridiculously high, given the continued high unemployment rate,” said Michael Pearce, senior US economist at Capital Economics. “People are so confident in their prospects of finding a new job that they are quitting at an unprecedented rate.”
Nearly 4 million Americans quit their jobs in April, according to data from the Bureau of Labor Statistics – an unprecedented number in the two decades the government has tracked this data, pushing the quit rate to 24% higher than before the pandemic. (Layoffs, which peaked at 13 million in March 2020, have fallen to more typical monthly levels of less than 2 million.)
Workers are in an ideal situation, they are ready to ask for more wages, better working from home arrangements and other perks that they feel they need to stay, and with many options if they leave.
“Employers, employees and job seekers will all have to figure out what they want in the future. Given the strained job market, employees and job seekers may have a stronger hand right now, ”said Nick Bunker, research director for the Indeed, the hiring lab.
Will work for a higher salary
There is a sure way for employers to keep talent: raise wages. Companies from Bank of America to Walmart announced salary increases, which were followed by an increase in the number of applicants interest.
According to Pearce, if the current rate of job resignations continues, average wages would rise at a rate above 3.5% this year – the fastest rate in 13 years.
Nowhere is this clearer than in the restaurant industry, where the typical worker only earns $ 20,000 a year and has a quit rate that is double the national average. After months of closures, bar and restaurant employers are softening wages and offering benefits, with wages now rising to twice the private sector average – 4% – since the start of the year.
Even with a pay rise, many service workers are turning their backs on the indignities that can sadly come with hospitality work – inconsistent hours, abusive customers, and increased risk of COVID-19. Food and agriculture workers most likely of all frontline workers to contract virus, pre-publication says study Californians of working age.
Neith Borja, a Starbucks shift supervisor, found herself working fewer hours at her downtown Manhattan location, but the shifts were more stressful, she said. The 28-year-old told CBS MoneyWatch that she constantly reminded customers to stay masked and stay away, while the baristas – only two – juggled drink orders. After conversations with his manager made him feel the situation would not improve, Borja made the “big decision” to quit work to preserve his sanity.
“I can’t keep working and I feel like… I’m just preparing for the worst – every time I go to work,” she recalls.
Prior to the pandemic, Borja viewed Starbucks as a model employer and had taken advantage of the company’s 401 (k) pension plan and tuition assistance program. The pandemic experience changed that, she said. “It was very revealing,” she said. “Now I wonder what other companies are doing to support their workers. “
Borja isn’t sure what her next job will be, but she’s pretty sure it won’t be in the restaurant business. “It’s an opportunity to start over and start a new job – meeting new people. “
From worker bee to boss
Not only are restaurants, retail stores, and transportation companies struggling to fill vacancies, they can barely retain the workers they already have. Daniel Zhao, chief economist at Glassdoor, predicted this will accelerate for several months, as workers who have remained in less than ideal jobs during the pandemic seek greener pastures.
Which doesn’t always mean a new job. Millions of Americans have, pushing the last year to a 15-year high.
Albi Michelle, a New York-based fashion buyer for 15 years, has always wanted to own her own business. The pandemic year – in which she contracted COVID-19, was ill for a month, spent up to 13 hours a day working at a computer, and saw co-workers withdraw from demanding jobs to spend more time with their children – prompted her to take diving. She hoped that being her own boss would give her more personal time, including time to start a family.
She now runs two companies: Alez Group, a luxury goods wholesaler and clothing line that has yet to be named. Just six months after starting Alez with a friend, Daisy Perez, Michelle says the business income is already the same as her salary as a business buyer, even though she works fewer hours.
“Money is important, but for me I can’t even explain how much freedom of happiness means. It’s so nice to go and take a few days,” said Michelle, speaking with CBS MoneyWatch from Curacao. , where she celebrated her 36th birthday.
However, for newly empowered workers, the honeymoon days are likely numbered. Economist Heidi Shierholz warns against over-reading April’s data, “which goes back a long, long time in terms of COVID,” she said. In May, wage growth slowed considerably and employers created nearly 600,000 jobs, hardly a sign of a long-standing shortage, Shierholz highlighted.
The economy is still 7.6 million jobs below its pre-pandemic level, and despite all the departures in April, the month ended with half a million more job seekers as many open positions. How long it will take for the other 7 million to return is an open question. In the meantime, those who can work are in the driver’s seat, enjoying the ride while they can.