High Turnover Rates Among Low-Wage Workers, Women, and People of Color Amid US Labor Shortage

Black and Asian populations at 35% and 40% respectively
Higher than the historical average of 30%

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Amid worsening labor shortages in the United States, it has been found that among non-managerial workers, low-wage workers, women, and people of color have higher rates of turnover and resignation.

On the 14th (local time), the Wall Street Journal (WSJ) reported this citing a survey conducted by consulting firm Mercer in August, which surveyed 2,000 workers. About 30% of workers were considering quitting, showing little difference from previous surveys, but there were significant differences depending on race and occupation.

In this survey, 37% of food service, retail, and hospitality workers responded that they were considering quitting, far exceeding the five-year average of 27%.

Among those considering quitting, Black and Asian employees were at 35% and 40%, respectively, higher than the historical average of 30%. In contrast, only 26% of White employees were considering leaving.

A survey by software company Qualtrics, which surveyed 3,600 workers, showed an increase in mid-level female managers considering changing jobs.

In the Qualtrics survey, 63% of mid-level female managers responded that they would remain with their company next year, down from 75% in the previous survey.

WSJ reported that turnover rates have been steadily increasing over the past few months, and as companies facing labor shortages are loosening hiring standards, workers’ expectations for better jobs have also risen, which is considered one of the factors.

According to data from the Department of Labor and others, more than 20 million workers resigned between May and September. This is more than a 50% increase compared to the same period last year and 15% higher than in the spring and summer of 2019.

Meanwhile, WSJ reported that the decline in labor force participation rate (the percentage of people employed or actively seeking work) among the core working-age population aged 25 to 54 is becoming an obstacle to labor market recovery.

Last month, the labor force participation rate of the core working-age population was 81.7%, still below the 82.9% recorded in February last year when COVID-19 first began.

WSJ noted that factors such as the resumption of in-person schooling and the end of unemployment benefits have not drawn the core working-age population back to the workforce as much as expected, and experts say it will take a long time for the labor force participation rate of this group to return to pre-COVID-19 levels.

It also analyzed that changes in workers’ views on work-life balance due to COVID-19, as well as concerns about the virus among core working-age individuals with young children, are factors preventing their return to the workplace.

WSJ said that if the recovery of the labor force participation rate among the core working-age population is delayed, companies facing labor shortages will have no choice but to raise wages, and that wage increases could prolong inflationary pressures and accelerate the Federal Reserve’s interest rate hikes.

This content was produced with the assistance of AI translation services.