The economy is getting better? I quit!
The rate at which Americans are quitting their jobs is rising. That can be a good sign for the economic and labor market outlook.
New numbers out from the Bureau of Labor Statistics say more people are quitting their jobs. In August, two million three hundred sixty four thousand workers told their bosses to take this job and shove it. That’s nearly 11% higher than last year – why?
Being labeled a quitter may sound like an insult, but when it comes to the economy – leaving your job can be a good thing.
“People quit jobs when they have an opportunity to go someplace else,” said Peter Cappelli a professor of management at Wharton. “Most everybody who quits voluntarily steps immediately into another job.”
The increase in quitters, says Cappelli, is about confidence in the economy.
“We know the quit rate always picks up when the economy picks up and the quit rate always falls when the economy goes down,” he says.
During the recession, employers pushed workers - hard. Some surveys found three quarters of workers at the time said they were going to look for a new job as soon as they could. For some, that meant waiting for affordable healthcare.
“That’s one of the biggest nuts to carry” says Andrea Grayson, a marketing consultant who recently quit her job to work on her own. Grayson lives in Vermont and credits her state’s plan to offer healthcare based on income with helping her to reach a decision.
“That definitely did add a level of confidence to my ability to be able to sustain my expenses when I’m out on my own,” she says.
Steve Kyle, a profess of applied economics at Cornell’s Dyson School of Applied Economics and Management notes that the economy needs more quitters like Grayson. After all, every time someone quits a job, it means a help wanted ad for someone else.
“The quit rate fell off a cliff and has since has been slowly trudging back into territory which we would more normally associate with a normal economy, but it’s not there yet,” he says.
To get back to a more normal quit rate, Kyle says America needs 2% of its work force to walk.
But don't worry. Wharton’s Peter Cappelli notes that there’s another way job opportunities can be created.
“A lot of employers these days create openings by laying people off so they don’t necessarily need people to quit,” he says.