More People Are Quitting Their Jobs. How Good of a Sign Is That?

Fact: in September, we put out an hour-long Freakonomics Radio podcast called “The Upside of Quitting.”

Fact: in September, more Americans quit their jobs than in any month since Nov., 2008.

Coincidence?

Actually, it’s not even a coincidence. The podcast was out on Sept. 30; the resignations (2 million of them) covered the month of September.

That said, more resignations would seem to indicate an improving economy. From Time:

According to a recent survey by job-search site Snagajob, 44% of respondents who quit in the past year did so believing they would find a better opportunity elsewhere, up from 31% the year before.

Why, you might wonder, is Time citing Snagajob rather than a government source? And should we believe those numbers?

Here’s what former Labor Secretary Robert Reich told me in an interview for the quit radio episode:

No, the government doesn’t have good data on this. The Bureau of Labor Statistics collects a lot of data as does the Commerce Department on jobs, but it’s very difficult to tell why people quit. That’s a subjective issue. Are you quitting because you hate your job? Are you quitting because you’re forced to leave? Are you quitting because you have a better job possibility? Some people are not completely candid about why they’re quitting to begin with, and it’s just a very murky area. These days when the economy is still bad, struggling to get out of the gravitational pull of the Great Recession, most people who leave their jobs are still not leaving because they have great, wonderful opportunities elsewhere. They are leaving for most of the time, most instances, particularly if they’re in the bottom two-thirds of the wage ladder, they’re leaving because they have no choice, their employer is basically kicking them out.

The fact is that unemployment is starting to drop; some commentators aren’t cheered.


JPB

This might be older, public employees. Government workers are reading the writing on the wall. A lot are getting out now with their pensions intact knowing that if they wait longer, they'll likely lose. A lot of new contracts are giving back on salaries, which would lower last-3-year calculations. So it pays for people in the 50-60 range to get out now and perhaps move into private employment.

Jeff

...while collecting their pension. Ugh. This country.

[WORDPRESS HASHCASH] The poster sent us '0 which is not a hashcash value.

Steve O

Their pension that they were promised when they signed up 35 years ago... Greedy bastards, wanting their contract obligations.

Andreas Moser

I quit my office job in London in November to move to the sunny island of Malta for the winter: http://andreasmoser.wordpress.com/2011/11/13/leaving-london-moving-to-malta/ - one of the best decisions in my life!

Bobby Calise

Very interesting topic...I guess if people are leaving out of choice instead of desperation, it's a good thing. I actually blogged about it recently here.: http://bobbycalise.wordpress.com/2011/11/09/how-to-quit-your-job-during-a-recession-and-live-to-tell-about-it/

Vincent

I quit my job with a software startup because the company is run by lousy human beings. No regrets.

CC

I left my job in November for another job with a 50% pay increase, though I am most likely not typical.

Allen

I am always amazed that the same people who think a 1 or 2 percent uptick is a great leading indicator seem to be able to ignore a 1 or 2 percent drop as "inconsequential". If it's cause for joy when it goes up that much it's a cause for equal worry. We need to create close to 200,000 NEW jobs every month just to place the people entering the workforce for their first job. Plus we have to create enough jobs to put the people laid off (nonsense, they were fired) back to work. So far what the experts cite as cause for hope hasn't come anywhere close to those numbers.

Hilary Louise

Benzinga covered this post over at (http://www.benzinga.com/news/11/12/2177816/ongoing-developments-in-the-unemployment-conundrum), pulling in Market Watch's Brett Arends' recent jobs commentary as well (http://www.marketwatch.com/story/10-reasons-the-crisis-isnt-over-2011-11-29).

They also pulled in Mr. Hamermesh's previous post on Freakonomics (http://www.freakonomics.com/2011/12/02/the-trouble-behind-the-new-unemployment-data/).

The synthesis on Benzinga is good, but I want to posit to all of you this question -- what do you think of the author's final analysis? Legit?

"One way or another, work is something fundamental to the human experience; given the nature of human economic activity, it makes sense that the market would offer individuals the ability to work; if the market is not offering individuals the ability to work, then something is seriously wrong systemically."

Brian

In response ^^ I think that Marco's argument of global unemployment as a youth discussion and systemic flaw/context is good, but not the root.

I don't know that levying taxes is the answer but I do like his discussion. More inclined to Arends all in all.

Travis

What if it's not analyzed from the point of view of how many different / attractive / possible job opportunities are out there, but instead from the point of view that there are so many workers and such a glut of recruitment that the jubs people are currently holding are bad enough that people would rather be unemployed or searching.

K

I'm young, was working 40+ hours for a non profit and making 25,000 a year (I should add, living in the bay area, which is more expensive than other places where a salary like that might enable you to have food on the table AND a roof over your head after bills and insurance.) People are quitting because companies are downsizing, making the jobs on the remaining employees brutally unfair, without additional compensation. 6 months later and I still can't get a job, but when you're making so little to begin with and stressed out to the point of manifesting physical symptoms, like SHINGLES when you're 26... Yeah, it's a gamble I'm willing to take.

Jim

My suggestion is that there is pent up desire to quit. In other words, people have been wanting to quit, but they were afraid to give up a job in this economy (rightly so). Add to that that companies realize that the job market is tough and they have to do less to retain employees. Bonuses have been meager, perks cut, and promotion opportunities scarce. More employees are harboring the desire to quit, and eventually that will build up and the water will start to pour over the top of the dam. If the economy should ever take off on a growth spurt, we might even see the dam break, but I don't think it's likely.

As to the unemployment situation, I get frustrated when I hear the confusing reporting of the unemployment numbers. Yes, unemployment is lower, but that's only because hundreds of thousands of people stopped looking for work. If things improve, they will start looking again. It's another case of pent up (this time) supply. I calculated the number of jobs we'd have to create each month to get back to full employment within 4 years. My estimate is 390,000 per month. See the detail here: http://bit.ly/u6ptmm

Read more...

Kressel

Hey, I applied to work for you, but you didn't pick me. : (