Consider this graph:
The index of real unemployment rate (explained here) serves to highlight the Great Recession (2008-2011) and the Pandemic Recession (2020-2021). The indices of quit rates and discharge rated (derived from date available here), complement the index of real unemployment rate and illustrate the following observations.
Discharges (firings and layoffs), as a fraction of the level of employment, peaked during the Great Recession and declined until the Pandemic Recession of 2020. The downtrend continued after the end of the lattere recession. Nothing unexpected there.
Quits, as a fraction of the number of persons employed, began to rise near the bottom of the Great Recession in 2009. The quit rate dropped sharply during the Pandemic Recession, then resumed its rise. That rise can be interpreted as a continuation of the rise that began in 2009. What’s interesting is that quit rate peaked in November 2021 and has generally declined somewhat since then. A straight line plotted through the index from its bottom would come close to the final point on the graph, which represents September 2022.
It is therefore my view that the surge in quits that occurred after the Pandemic Recession is a continuation of the rise that began in 2009. The deeper question, then, is why have quit rates been rising for the past 13 years? I doubt that there’s a good answer to that question.
An analyst at the Bureau of Labor Statistics addressed the question and came up with this:
The historical data examined in the article suggest that recent quit rates, while certainly high for the 21st century, are not the highest historically [emphasis added]. Nonetheless, the pace of resignations seems to have risen more quickly than one would have expected from labor market tightening alone. [But the rate has slackened since this was written.] Future research should assess alternative explanations for this development, taking into account pandemic-related factors such as increased stimulus payments, health concerns, childcare issues, and changing attitudes toward work. Examining which demographic groups have seen their quit rates rise most quickly might provide clues here.23
The footnote leads to this paper, which concludes with this:
Evidence from both recent worker surveys and historical data on quits shows that the “Great Resignation” is not as unusual as one might think. Waves of quits have been common during fast recoveries in the postwar period. In line with this historical evidence, the recent wave reflects the rapid rebound in labor demand for young and less-educated workers, largely driven by the retail, leisure and hospitality, and accommodation and food services sectors.
In sum, quitting a job doesn’t mean leaving the labor force. More likely it means jumping to a better job or doing something that doesn’t count as a job (see below).
The more interesting question is why the real rate of unemployment remains significantly higher than it was in 2000. It is my view that “marginal workers” — young persons without special skills or training — quit returning to the labor market out of a habit that was born during the Great Recession, and which was reinforced ruing the Pandemic Recession. The habit was fed by:
Obamacare, which enabled persons under the age of 27 to obtain health insurance through their parents’ policies,
extended unemployment benefits,
“free money” (stimulus checks),
enjoyment of the leisure afforded by the precding, and
the expansion of the “gig” economy, wherein work is a sometime thing and it is done not as an employee but as an “independent contractor”.
It’s not all the fault of government, but most of it is.