Shifts in Labor Participation: The Great Resignation Becomes the Great Reshuffling

More than 47 million workers quit their jobs in 2021, in what has become known as The Great Resignation. However, many of these workers are getting re-hired elsewhere. Hiring rates have outpaced quit rates since November, 2020.

The U.S. Chamber of Commerce has published some statistics on this reshuffling of the labor force, which I will reproduce here.  As shown in the chart below, quit rates in leisure and hospitality  (which require in-person attendance and pay lower salaries) were enormous. However, the recent hiring rates have been even higher in this area, so the shortage of labor there is only moderate.

When taking a look at the labor shortage across different industries, the transportation, health care and social assistance, and the accommodation and food sectors have had the highest numbers of job openings.

But yet, despite the high number of job openings, transportation and the health care and social assistance sectors have maintained relatively low quit rates. The food sector, on the other hand, struggles to retain workers and has experienced consistently high quit rates.

I am not sure I understand exactly what the following chart represents, but it was deemed important:

I think the % of yellow is the ratio of unemployed persons with experience in the field (i.e., who could readily participate) to the total job openings in that field. E.g., “…if every unemployed person with experience in the durable goods manufacturing industry were employed, the industry would only fill 65% of the vacant jobs.” These are interesting data, although I’d be even more interested in seeing  numbers on unfilled job openings as fraction of total (filled and unfilled) job openings to give a better idea on how much each industry is hurting for labor. Anyway, here is some of the commentary from the article:

It is interesting to look at labor force participation across different industries. Some have a shortage of labor, while others have a surplus of workers. For example, durable goods manufacturing, wholesale and retail trade, and education and health services have a labor shortage—these industries have more unfilled job openings than unemployed workers with experience in their respective industry. Even if every unemployed person with experience in the durable goods manufacturing industry were employed, the industry would only fill 65% of the vacant jobs.

Conversely, in the transportation, construction, and mining industries, there is a labor surplus. There are more unemployed workers with experience in their respective industry than there are open jobs.

The manufacturing industry faced a major setback after losing roughly 1.4 million jobs at the onset of the pandemic. Since then, the industry has struggled to hire entry level and skilled workers alike.

And finally:

Some industries have been less impacted by labor shortages but are grappling with how to deal with the rise of remote work. For example, the rise of remote work might explain why there has been less “reshuffling” in business and professional services.

What to Read: Claudia Goldin’s Career and Family

A better battery is an excellent gift, but for the gift that never needs recharging, a book is always a great idea. So this week Joy asked us to recommend a book. Again, this would be great as a gift or for yourself!

My recommendation is a very new book: Claudia Goldin’s Career and Family, which just came out this month. Confession: the book is so new, that I’ve only read about half of it so far! But this book is, as they say, self-recommending.

Goldin has spent almost her entire academic career studying the history of women’s participation in the US labor force. I think it’s fair to say that there is no person living today that knows more about the subject, possibly no one ever. This book is her attempt to sum up much of her research into a cohesive narrative about the changes in women’s labor force participation throughout the 20th century.

Her 2006 AEA Ely Lecture, “The Quiet Revolution,” was an earlier attempt to explain these long changes, and it is highly readable still today. Her 2014 AEA Presidential Address, “A Grand Gender Convergence,” is also excellent (watch the video of it too!). But this book brings all the ideas together into a complete narrative, tracking five cohorts of women and their experience in the labor force from 1900 to 2000. The last of these five cohorts matches the title of her book, the generation of women that entered the labor force since 1980 and now have a reasonable chance of achieving both an career and a family, rather than having to chose between the two.

This does not mean, and certainly Goldin would not say, that the journey is over and all is well for women today. Goldin focuses primarily on college graduates in this story, since they are the group most well-positioned to achieve the goal of having a career and a family. Obviously there are still challenges, and Goldin spends some time discussing one that the COVID pandemic revealed but was always there: the challenge of finding affordable childcare.

If you want a taste of the book, you can read or watch her 2020 Feldstein Lecture, “Journey Across a Century of Women.” But really the story is so complex that it does take a book to explain it all.

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