We keep hearing about the Great Resignation, a fast-growing trend of millions of workers quitting their jobs. The most recent data from the U.S. government shows that around 4.3 million Americans left their jobs in August alone. Surprisingly, experts don’t have specific answers to where they are going or what they’re doing after resigning their jobs.
The prevailing theory is that enhanced unemployment benefits, financial stimulus checks mailed out to families, fear of catching the virus and lack of childcare are responsible for potential workers sitting on the sidelines. Once the extra unemployment benefits ended, to the surprise of economists, we didn’t see more people accepting new jobs. It feels that there has to be more to the story.
Meaning, Purpose and Fulfillment
Roughly 40% of the jobs that people quit were in the restaurant, hotel, travel, bars, warehouses, manufacturing and healthcare sectors. These folks contend with long, constantly changing hours, rude customer behaviors, low wages and high stress.
These workers are pushing back against poor pay, unpleasant working conditions and a lack of respect from management. Once they’ve left, many take their time to seek out new types of opportunities that offer meaningful work and a path to advance.
It’s not just the blue-collar workers. White-collar professionals have also reassessed their work-lives and decided it’s time for a change. There is a new dynamic at play. We used to view work as a chore that’s needed to earn a paycheck. We lived to work. Now we want more.
Employees are calling for flexible work arrangements, remote options, shorter work days based on output and performance as opposed to face time, four-day workweeks and the freedom from being chained to a desk ten hours a day with a micromanaging boss and long commute.
Confronted with Covid-19, it forced us to face reality. We only have one short life to live, and we don’t want to waste it on doing something we don’t like. Instead, people are reimagining their work-lives and seeking out careers that offer the chance to make a difference in the world. Some people are transitioning to roles that offer this type of experience. Others are upskilling, going back to school to learn something new or finding a job in a different industry that offers growth opportunities and job satisfaction.
When a person loses or willingly leaves their job, the usual process is to seek out another similar type of role within their industry. They want to keep progressing forward in their desired profession. Intrepid people may try to pivot to a new type of role or reinvent themselves. The bold and adventurous turned towards entrepreneurship.
There has been a boom in new businesses. Becoming an entrepreneur is considered cool and trendy. Saying you work at a startup is now a status symbol of success. A record number of new businesses have been created. In July 2020 around 600,000 new business applications were filed, up 100% from the year prior.
The U.S. has started new businesses at a record-setting rate, in what is being deemed as a “startup boom.” John Haltiwanger, an economist at the University of Maryland, said that within the first two months of the virus outbreak, there was a noticeable rise in new business applications.
Inc. Magazine, a publisher that covers small emerging businesses, echoed Haltiwanger’s findings and wrote, during the early days of the pandemic “more new businesses were launched in the U.S. than in any quarter in history,” and “nearly 1.4 million startups were founded.” This trend keeps gaining momentum. You’ve probably noticed many new names popping up all over the place in our new business world.
The Wealth Effect
The stock market has been hitting new highs on a regular basis. The real estate market is blazingly hot. Investors in cryptocurrencies, NFTs and meme stocks have reaped financial windfalls. There was about a 47% gain in the S&P 500 from the pandemic induced low point in March 2020 to now, and an approximate 25% rise in home prices since.
Early in the pandemic, economists predicted a V-shaped recovery in which everything would bounce back, helping the vast majority of Americans return to where they were pre-pandemic. This didn’t happen. Instead we witnessed a K-shaped recovery. The upwards swoop benefited the rich and the downward angle represented everyone else who didn’t participate fully in the rebound.
For two-income households, it appears that many women pulled out of the job market to render childcare as juggling work and kids was too much stress during the outbreak. With the wealth effect, it became financially feasible to remain at home until there is greater certainty.
Retiring Early Or Forced Into It
The wealth effect enabled and prompted seasoned workers to call it a day and retire. Their investments are at all time highs. The Baby Boomers’ homes substantially increased in value. Feeling financially comfortable and secure, they chose to get out of the corporate world on a high note.
Sadly, there are a large number of older people who felt pushed out or were shoved out of the job market. Many have suffered from long-term unemployment, which is a pernicious problem. Once you are out of the job market for a certain length of time, it’s hard to get back in.
Ageism takes a toll. Hiring managers presume that the older workers don’t possess the current tech skills. They also falsely believe that workers of a certain vintage will not get along with the younger generations and try to take control.
As time goes by without finding a job or getting interviews, they give up. These folks fall off the radar of government data and are forgotten about.
Teresa Ghilarducci, a labor economist and retirement security expert, said in an interview with MarketWatch, “Older workers are losing their jobs at a faster rate, relative to younger people.” Ghilarducci expressed her concern, saying, “A total of four million people [are] potentially pushed into retirement before they are ready. Half of Americans aged 55 and up will retire in poverty or near poverty.”
It was reported that “some 21.2 million Americans in their 60s are no longer in the labor force,” and “Millions of Boomers in their 60s still want or need to work, and are having a hard time finding jobs.”
According to her study, “Early retirement [is] a major force in accounting for the decline in the labor-force participation. With the high sensitivity of seniors to the Covid-19 virus, this may reflect, in part, a decision to either leave employment earlier than planned due to higher risks of working or a choice to not look for new employment and retire after losing their work in the crisis.”
To add insult to injury, many older people lack the money needed to sustain them in retirement, especially as life expectancy has increased. The Federal Reserve Bank reports roughly 44% of Americans say their retirement savings are not on track and 25% aren’t financially protected with pensions or sufficient retirement savings.
The Rise Of the Day Trader
Another entrepreneurial trend is seen in the rapidly expanding ranks of young, novice day traders and investors. As the stock seemed to only go up, more people became interested in investing and trading securities. Some take a long term approach and others have a YOLO (you only live once) approach, hoping to hit it big quickly.
Robinhood, the go-to trading app for many millennials and Gen-Zers, reported about 22.5 million accounts opened, and a majority of them are actively traded. Cryptocurrencies also became all the rage. On Twitter and other social media sites you’re daily inundated with the latest digital asset that’s primed to make a big move. Non Fungible tokens, better known as NFTs, have also found a brisk market in buying and selling these properties, to the tune of upwards of about $3 billion.
The ‘quitters’ sought out jobs with meaning and purpose, flexibility and choices. They are pivoting to new types of jobs and reinventing themselves as business owners or stock traders. The surge in wealth creation over the outbreak enabled rich boomers to retire. Less fortunate older folks left the workforce due to lack of opportunities.
