Why are people leaving their jobs in record numbers?
IIf you’ve looked at the latest job reports, you don’t know how inflation could be at an all time high, but workers are still quitting their jobs in unprecedented numbers, you are certainly not alone.
In this segment of Backstage Pass, registered on 12 november, Fool contributors Toby Bordelon, Jon Quast and Rachel Warren discuss these seemingly mutually exclusive trends.
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Toby Bordelon: Let’s see. Let’s go to our third question here continuing. We’ve had some confusing news today, guys, from consumers. I am not sure I really understood. We received a report on consumer sentiment. On the one hand, it appears that consumer confidence is at its lowest in 10 years, its lowest in a decade. One in four consumers say they are reducing their standard of living due to inflation concerns. [laughs] In contrast, 4.4 million people left their jobs in September.
It’s a record. Most resignations in a month since they followed this, I guess. What is happening here? Are people really saying, “Man, this economy sucks. I’m afraid to make ends meet. But you know what ? Hell, I’m going to quit my job anyway and hope for the best. ” I do not understand that.
Jon Quest: This is probably all Dogecoin millionaires out there. [laughs]
Toby Bordelon: Maybe that’s it.
Jon Quest: That’s it. [laughs]
Toby Bordelon: It is a real possibility. I don’t know what’s going on. Maybe there is a lag in the schedule because this jobs business starts from September, maybe consumer sentiment is a little later than that. Maybe things are going really well for 4.4 [laughs] million people, maybe they’re Dogecoin millionaires out there, and not everyone is doing so well. It’s a possibility.
Something else? Listen, we’re talking about investors. What should I do with this as an investor? It confuses me. I want you to tell me, is there a business or investment that you can suggest to me for this confusion and uncertainty? What am I going with? Rachel, what do you think?
Rachel Warren: Actually, I found these numbers really interesting and I think it’s partially disconnected, but I think there are other factors at play, and I’ll touch on them briefly before I talk about a company that , in my opinion, is actually a great choice. in this uncertain environment. Personally, I don’t necessarily think it’s that 4.4 million people are in a different situation from the rest of the consumers.
I think those two facts are that consumer confidence is at its lowest in 10 years and you also have a record number of people leaving their jobs. I don’t think they have to be mutually exclusive, I think they can go hand in hand. Here’s why. You look at the reasons people quit their jobs, the areas in which they quit.
Those industries that have the highest quit rates. You start with that basic figure, about 3% of the workforce in the United States quit their jobs in September. But then you look at the industries where most of those drop-out rates are coming from.
These are areas such as retail, hospitality, health services, recreation, travel and recreation, and even the roles of state and local governments. Many of them are industries where we have sometimes faced low wages and in some cases less than ideal working conditions for some time.
And this has only increased during the pandemic. Now the workers have a lot of influence. I recently read about this whole labor shortage, it’s the work of the workers. Obviously, it is not because there is a shortage of positions.
Workers have influence now, it doesn’t surprise me that these are the same fields, those industries where we see high quit rates, even though inflation is high and consumers are worried about the prices of goods. daily. People are looking for roles, they are looking for companies that pay better wages, maybe that offer more flexibility.
I also think that if you’re worried about buying commodities when the cost of inflation is high, it makes sense that some of the industries where you see the highest quit rates are those where wages have historically been low. and conditions are often less than stellar, especially in a pandemic environment.
Some of the workers in fields like hospitality and retail, for example, who historically have low wages and sometimes at or below the minimum wage. These are also areas where workers may have to deal with some of the most important safety concerns during the pandemic. I think it almost makes sense that you still see these high drop rates in these areas, even though consumer goods are skyrocketing.
I think as an investor you look at this. I don’t think these trends are going to ease in the near future, I think these are trends that we have seen in recent jobs reports, and I think it will continue.
Jon quest has no position in any of the stocks mentioned. Rachel Warren has no position in any of the stocks mentioned. Toby Bordelon has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.