Why the “Great Resignation” became the “Great Remain”: Labor Economist

The U.S. job market has undergone a dramatic shift in recent years, from a market characterized by record-breaking employee turnover to one with almost no employee turnover.

In other words, the “Great Retirement” of 2021 and 2022 has transformed into what some labor economists call the “Great Remain,” a job market with lower levels of hiring, retirement, and layoffs.

“Pandemic-era labor market disruptions are increasingly in the rearview mirror,” said Julia Pollack, chief economist at ZipRecruiter.

Employers rushed to hire as the U.S. economy restarted from a coronavirus-induced lull. As companies compete for talent, the number of job openings has increased to historic levels, unemployment has fallen to its lowest level since the late 1960s, and wages have grown at the fastest pace in decades.

More than 50 million workers will quit their jobs in 2022, breaking the record set the previous year, attracted by more fulfilling job opportunities in other countries.

However, the labor market is gradually cooling down.

Alison Shrivastava, an economist at job site Indeed, said that job turnover “reached a feverish peak in 2022 and is now below where it was before the pandemic began.”

Hiring rates have slowed to the lowest level since 2013, excluding the early days of the pandemic. However, the number of layoffs remains low by historical standards.

This dynamic of more people staying in their jobs despite low layoffs and unemployment rates “suggests that as more employees stay in their current jobs, employers continue to retain their workforce.” said Shrivastava.

ZipRecruiter’s Pollack said employer “scars” are a major factor in so-called great stays.

Companies are now reluctant to lay off employees, having struggled to hire and retain them just a few years ago.

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But the number of job openings is declining, and the number of people retiring, a barometer of confidence in workers’ ability to find new jobs, is declining. Pollack said the move was mainly due to another factor, namely the Federal Reserve’s interest rate hike campaign from early 2022 to mid-2023 to curb high inflation. said.

He said higher borrowing costs led to companies pulling back from expansions and new ventures, which also led to job cuts. The Fed began cutting interest rates in September, but after Wednesday’s latest rate cut, it signaled the pace of rate cuts may be slower than previously expected.

Indeed’s Shrivastava said overall trends suggest that “the labor market is stabilizing, although it is still being shaped by the lessons of recent shocks.”

Pollack said this great stay means Americans with jobs will have “unprecedented job security.”

But people looking for work, such as recent graduates and workers dissatisfied with their current roles, are likely to have a harder time finding work, Pollack said. She recommends expanding your search and trying to learn new skills.