The number of workers voluntarily leaving their jobs (aka, the “quit rate”) across the United States is up. According to Janet Yellen, Chairman of the Federal Reserve Board, that’s a good thing, indicating labor market “health.”
Discussing this counter-intuitive notion, Yellen recently said that although the nation’s economy has yet to fully recover, the rising quit rate means the economy is headed in the right direction. To quote the Fed Chair:
[M]ore workers voluntarily quit their jobs when they are more confident
about their ability to find new ones and when firms are competing more
actively for new hires. Indeed, the quits rate has picked up with
improvements in the labor market over the past year, but it still remains
somewhat depressed relative to its level before the recession.
The Fiscal Times recently reported that quit rates general correspond with economic ups-and-downs. To wit:
- Prior to 2007, the quit rate/month for non-farm workers was 2+%.
- Between 2007 and 2009, the quit rate/month dropped to 1.3%, the lowest since the mid-1990s.
- Quit rates have remained low since the recession’s official end in 2009.
- Between 2012 and 2014, the quit rate gradually rose to 1.8% by June 2014.
Mrs. Yellen’s observation would make sense, that is, if one assumes better jobs are out there. Yes, indeed, that would provide a motive for employees to quit their jobs and move onward to more bountiful pastures.
However, the Bureau of Labor Statistics has reported that as of August 1, 2014, the number of unemployed persons in the United States was 9.7M. In addition, Factcheck.org reports the following statistics since Obamanomics were implemented in 2009:
- The economy continues to gain jobs (note: mostly government and low-wage), but the number of long-term unemployed is nearly double what it was when President Obama was inaugurated (not good).
- Wages remain stagnant, increasing only 0.3% after inflation (not good).
- The number of low-income persons on food stamps remains just below the record level reached in 2012, with 15% of the population still receiving entitlements.
Perhaps Mrs. Yellen is wrong. The truth may be that the quit rate/month is rising because people are voluntarily leaving their jobs and going on the dole.
Let the discussion begin…
To read the Fiscal Times report, click on the following link:
"People Are Quitting Their Jobs. That's Good News."
To read the Factcheck.org report, click on the following link: