The American people really enjoy giving somewhat glamorizing names to unfortunate events and trends. Look at some of our country’s greatest economic hardships for example. The stock market crash of 1929 led to a four year long depression which we labeled “The Great Depression”. More recently in 2008 we experienced a stock market crash which resulted in a shorter economic downturn for 2 years which we labeled “the Great Recession”. The use of the word “great” in these cases obviously does not mean that we find the situations to be favorable or to be of higher than average quality. These have not been happy times for our country and often subsequently the rest of the world as well. “Great” is instead used to detail the scale of the situation. It is supposed to portray the intensity of these hardships. Most recently the term has been coined for a unique employment conundrum that has employers looking for answers.
“The Great Resignation” refers to the recently upward trend in the quit rate in the United States. Like it sounds, the quit rate is simply how many Americans are quitting their jobs. Last November we hit a quit rate of nearly 4% of the available workforce. This means that 4% of Americans quite their jobs in November, the highest number in the 22 years it has been recorded. So why are people quitting their jobs? This all stems from the beginning of the COVID-19 pandemic. Businesses were shutting down as the national economy was thrown into a coma because of the spread of the coronavirus. In April 2020 millions of Americans were out of jobs, the unemployment rate was 14.7%. Slowly as time went on we began to learn how to work in the midst of the virus. For many who did not lose their jobs this meant working from home. Millions of Americans still today now work from the comforts of their home office rather than driving in to a brick and mortar office building. For others this meant having to find safe ways to operate their business to follow state and federal health guidelines. Slowly but surely we continued to get closer to our previous production levels. But, to do so we would once again need workers to fulfill the new levels of labor. With all these new job openings, employees started looking for greener pastures.
Being very introspective, employees started to evaluate themselves and their worth. They saw what they were being paid, what benefits they received, and the respect they were being given and many did not think they were receiving their fair share. Plus, with all the jobs that were now available, making a switch to a place where they feel more valuable and the employer quantifiably valued them more was easier than ever. So that is how we are where we are. The job market is now extremely competitive because there are tons of new jobs and still a limited workforce. The rebound gave the power to the employees. That is why you are seeing so many places begin to adopt a starting wage of $15/hour to simply stay competitive with other businesses. Places are also beginning to offer more and more benefits to their employees to keep them from leaving. Higher pay, more PTO, better insurance coverage, and implementation of retirement savings plans are all examples of how employers are trying to keep people from quitting. Time will tell whether these new measures will price some businesses out of business as employee turnover continues to be sky high.
With March Madness in full swing, the choice for this week's was a no-brainer.
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