A new report shows that low unemployment and a large number of openings aren't causing many workers to change jobs. The result is a less dynamic economy.
More than 6 million jobs were open nationally in August, only slightly less than July’s record in numbers that go back to 2000.
But the “quits” rate, which measures the percentage of people who voluntarily left their jobs in a month, was only 2.1 percent. The number is essentially unchanged over the past two years, after rising from the trough (1.3 percent) of the Great Recession. It has never regained its January 2001 high of 2.6 percent. Hires (5.4 million) and separations (5.2 million) were also little changed. The layoffs rate was only 1.2 percent
The data are contained in today’s JOLTS report, or Job Opening and Labor Turnover Survey, from the U.S. Bureau of Labor Statistics. For economists, this is an important measure of the labor market’s health. Specifically, how willing are people to leave their current job and take a new position. In the past, this was an element to a dynamic economy and the ability of workers to improve their salaries.
Explanations for the change are largely guesswork until more serious scholarship is done. I suspect that fear leftover from the recession plays a significant role — better to keep the job you have than to take a leap into a venture that might not last. Ongoing pressure for ever-greater efficiencies may have plenty of workers cowering, as one chief executive put it (I forget his name). Although job openings are high, the abundance isn’t spread equally. For example, the number of unfilled jobs in construction remains well below its 2007 peak.
Americans are moving less for jobs, another factor holding back the economy. Some have pointed to the desire for work-life balance as keeping workers in place. Also, the jobs available may not pay that well, giving people little incentive to make a move. Finally, American business formation is at historic lows and the average firm is getting older, limiting new opportunities and holding people to what passes for a secure job today.
JOLTS was closely watched in the months after the recession as a reliable indicator of when things might be getting better. But with the expansion more than eight years old and the unemployment rate at a 16-year low, it’s showing its limitation. We need new and better metrics.
Today’s Econ Haiku:
Business rooting out
Its sexual harassers
But not the White House