The Great Resignation Wave Created by the Pandemic... Record High Retirements in the US

4.53 Million Retirees in November
Labor Shortage Deepens as Job Changes Increase Seeking Higher Wages
Could Become a Catalyst for Innovation Creation

[Asia Economy New York=Correspondent Baek Jong-min] Ian Cohen, who lives in Chattanooga, Tennessee, has already quit his job twice since the COVID-19 pandemic began. On December last year, he left a startup where he had worked for a year and will start working as a manager at a tech company next week. Finding a job was easy. On the job site LinkedIn, he chose one of the positions offering higher wages and better benefits.

The 'Great Resignation' march of American workers shows no signs of stopping. Analysts say that as the number of job openings continues to exceed the number of job seekers, the phenomenon of changing jobs in search of higher wages is becoming entrenched.

◇ The Great Resignation entrenched in the U.S. = According to the Job Openings and Labor Turnover Survey (JOLTS) released by the U.S. Department of Labor on the 4th (local time), the number of resignations in November last year was 4.53 million. This is an 8.9% increase from 4.36 million in the previous month. It surpassed 4.4 million in September and is the highest since statistics began in December 2000.

The quit rate was also 3.0%, matching the previous record high.

The number of job openings in U.S. companies in November slightly decreased to 10.6 million but still far exceeds pre-COVID-19 levels. The number of job openings has remained above 10 million for six consecutive months.

The Washington Post reported, "As the labor shortage becomes entrenched, workers are leaving in search of better pay and benefits."

The number of job openings estimated by the private sector is even higher. Employment information company Indeed estimated that the number of job openings reached 12 million as of December. Nick Bunker, director at Indeed, explained, "Low-wage workers, who were most affected by COVID-19, have actively started changing jobs."

Julia Pollak, an economist at job site ZipRecruiter, diagnosed that workers are not simply leaving jobs. She explained, "Workers are moving from low-paying, disrespectful, or inflexible jobs to the opposite."

Resignations among healthcare workers are also notable. The quit rate in the healthcare industry reached 3% in November last year, the highest ever. The Wall Street Journal (WSJ) expressed concern about healthcare gaps as medical personnel complain of fatigue and leave their jobs amid the prolonged COVID-19 crisis.

Daniel Zhao, chief economist at Glassdoor, told The New York Times (NYT), "Employers' demand remains extremely high, and competition for talent has intensified," adding, "This means more jobs, higher wages, and more turmoil in the labor market."

The phenomenon of changing jobs for higher wages is also a factor that increases inflationary pressure in the future. It is particularly negative for small and medium-sized enterprises (SMEs), which are less able to afford wage increases compared to large corporations. Diane Swonk, economist at Grant Thornton, explained, "The situation is more difficult for SMEs than for large companies."

Even if wages rise through job changes, workers' dissatisfaction is unlikely to disappear easily. Inflation is rising faster than wages, resulting in a negative real wage growth rate. As of November last year, the consumer price index rose by 6.8%. According to a survey by NYT and SurveyMonkey, only 21% of American adults said their financial situation had improved compared to a year ago.

Complaints about rising inflation are leading to distrust of President Joe Biden. In a poll released by CNBC on the same day, 60% of all respondents said they do not support the Biden administration's economic policies.

◇ "The great migration could be a catalyst for innovation" = On the other hand, some analyses suggest that this wave of resignations in the U.S. could have a positive impact on the economy. The Japanese Nihon Keizai Shimbun analyzed the Great Resignation in the U.S. in an article the day before and predicted, "The talent migration triggered by COVID-19 could support productivity improvement and innovation creation." This is for the same reason that people retiring from financial institutions during the 2008 financial crisis became the driving force behind fintech (finance + technology) companies.

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