My City February 2022

MYECON

Why Are Workers Quitting? BY DR. CHRISTOPHER DOUGLAS

L abor market shortages do not appear to be improving and in fact, might be getting worse. Labor force participation, de‚ned as the percentage of the population either working or actively looking for work, is at a 44-year low. Only half of the decline in labor force participa- tion experienced during the 2020 shutdown has been recovered. e labor market situation appeared to be deteriorating at the end of 2021, as well as into 2022. In a normal economy, approximately 2% of the labor force leaves a job in a given month. is quit rate has increased past this level every month since July 2020. A record 3% of the labor force quit their jobs in November 2021 after a record 3% quit in September. Food service and hotel workers had the highest quit rates in December, when nearly 7% of workers in these industries left their jobs, which is stunning. Over 4% of workers in the retail sector quit in December, as well. It is not surprising that these are the sectors in which the most workers are quit.Working in these service sectors was grueling before the pandemic and only more so after. Staœs are short-handed, which is leading to employee burnout. Many employers mandate their workers wear masks, even though the customers don’t. It’s not hard to imagine how hard it would be to wear a mask while working in these jobs, as well as dehumanizing.We have all seen the photos of people eating in restaurants or at- tending events unmasked while the staœ is masked.We’ve also seen viral videos of customers screaming at workers because of higher prices or some government-mandated restriction a worker is required to enforce. It is unsurpris- ing that quits are surging in these sectors and consumers should expect the retail experience to further deteriorate.

e childcare industry presents another issue. ere are 90,000 fewer childcare workers in the U.S. than before the pandemic, further pushing up prices of an already expensive service. Parents must plan for schools to suddenly announce that they are “going virtual” (as it happened in Genesee County early in January), or that a child’s bus won’t be coming that morning due to a driver shortage, something that has also routinely happened. Schools going virtual and bus routes not running result in parents having to scramble to ‚nd childcare in a childcare industry that is severely short of workers. Many parents run the numbers and realize that working is not worth these hassles. is is especially true with 40-year high in‡ation eroding the purchasing power of wages. Labor market shortages will not be resolved until all COVID restrictions are lifted, schools stay open permanently and life returns to normal. One would have hoped this would happen with the vaccine; the fact that it hasn’t is shocking. COVID fatalities are not increasing despite cases spiking due to Omicron, giving evidence that the vaccine is working. Life needs to return to nor- mal. e current situation is simply not sustainable. ®

nicoletaionescu / stock.adobe.com

Dr. Christopher Douglas came to the Univer- sity of Michigan-Flint in 2006. He earned a B.S. in Electrical Engineering and a B.S. in Economics from Michigan Technological Uni- versity in 2001, and his Ph.D. in Economics from Michigan State University in 2007. As

Associate Professor and Chair of the Department of Economics, he teaches Principles of Microeconomics, Principles of Macroeconomics, International Economics, Public Finance, and Sports Economics.

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