Jobs report pt. 2- The Great Resignation has changed the game

While a lot of the media attention from the August US jobs report came from the tepid amount of total payroll growth, not much was mentioned about a significant fall in the unemployment rate.

The unemployment rate fell by 0.4 percentage point to 4.8 percent in September. The number of unemployed persons fell by 710,000 to 7.7 million. Both measures are down considerably from their highs at the end of the February-April 2020 recession. However, they remain above their levels prior to the coronavirus (COVID-19) pandemic (3.5 percent and 5.7 million, respectively, in February 2020).

Among the unemployed, the number of permanent job losers declined by 236,000 to 2.3 million in September but is 953,000 higher than in February 2020. The number of persons on temporary layoff, at 1.1 million, changed little in September. This measure is down considerably from the high of 18.0 million in April 2020 but is 374,000 above the February 2020 level. The number of reentrants to the labor force decreased by 198,000 in September to 2.3 million, after increasing by a similar amount in August. (Reentrants are persons who previously worked but were not in the labor force prior to beginning their job search.)

526,000 more people were listed in the household survey as "employed", and that continued the growth that we've seen throughout 2021. In fact, employment growth has picked up in the last 3 months.

(I intentionally dropped off the big decline in April from these charts, as it throws the scale off by quite a bit).

That being said, some of the drop in the unemployment rate in September was driven by the "not-so-good reason" - 186,000 people leaving the work force in September, which is the opposite of what we'd seen in recent months.

The recent trends are also the opposite of what GOP/business hacks were claiming would happen when expanded unemployment benefits were in place throughout the Summer, then went away in September. SO PUT THAT TALKING POINT DOWN.

A PBS report from over the weekend is probably closer to the truth, and illustrates how the COVID era has caused a change in attitude toward work, in what is being known as the "Great Resignation."

Paul Solman: Workers like these are quitting their jobs at the highest rate in 20 years, because, for many of us, the pandemic has prompted a professional reassessment. So says Harvard Business School's Tsedal Neeley.

Tsedal Neeley, Harvard Business School: We cannot underestimate the extent to which people have experienced such stress, such anxiety, and a ton of burnout in the last 18, 19 months. That is also driving their interest to say, I don't want this lifestyle as it is. I want to change it.

Paul Solman: Georgetown University's Brooks Holtom has long studied worker turnover.

Brooks Holtom, Georgetown University: Periodically, people experience shocks that cause them to reconsider how work fits with the rest of their life. All of us for the past 18 months have experienced one of these shocks....

Paul Solman: And ever so many have, led by millennials.

In the last year, the rate at which workers age 30 to 45 resigned rose by over 20 percent. Some of the hardest-hit sectors? Health care and tech. The specific reasons? First and perhaps foremost, burnout.

Kaleena Soorma, [Former] Director, Patient Care: Your staffing is at an all-time low. The morale is at an all-time low. It's traumatic. It's stressful. We're at a breaking point.

The punchline of that story from reporter Paul Solman? "A labor force that no longer accepts 'business as usual'"

And while a sizable amount of work force dropouts quoted in the piece are men, the data from the jobs report indicates that women have been the ones most likely to leave the work force in recent months have been women, with September seeing significant dropoffs in both 2020 and 2021.

The Bureau of Labor Statistics says that 77% of private education and health services jonbs are held by women, and women have 58% of government jobs. These areas had notable seasonally-adjusdted job losses in September, which reflect a lack of seasonal hiring that coincides with the start of the school year. Seems related.

Along with the workforce dropouts, a former Obama economic advisor points out that a loss of more jobs and slower recovery for women is unlike every other recesssion over the last 40 years.

Women's employment growth has driven every recovery and its women's employment growth that has nearly ground to a halt and has slowed our recovery. pic.twitter.com/FsfXKGhmjB

— Betsey Stevenson (@BetseyStevenson) October 8, 2021

The lack of available workers along with the return of consumer demand (even through COVID's resurgence in August and September) means that employers are having to shell out more in order to convince people to work several types of jobs. Average private sector wages grew by more than 1% between July and September, and while manufacturing and overall private sector wages have merely matched inflation since last Summer, leisure and hospitality jobs have had wages take off like a rocket.

This may prove to be one of the biggest effects of the COVid era. In addition to so many other people being DEAD, many others used the shutdowns and potential exposure to the virus to re-evaluate how they should live their lives, and whether it was worth it to continue the low pay and iffy working conditions.

While a lot of employers don't seem to understand this and whine in public about it, others in both the employer and employee sides are adjusting to the new realities of the market of 2021. As the PBS reporter said, we're going to have to recognize that there might be a new way of doing business in a lot of industries.