Why the 'great resignation' became the 'great stay,' according to labor economists
The U.S. job market has undergone a dramatic transformation in recent years, from one characterized by record levels of employee turnover to one in which there is little churn.
In short, the "great resignation" of 2021 and 2022 has morphed into what some labor economists call the «great stay,» a job market with low levels of hiring, quits and layoffs.
«The turbulence of the pandemic-era labor market is increasingly in the rearview mirror,» said Julia Pollak, chief economist at ZipRecruiter.
Employers clamored to hire as the U.S. economy reopened from its Covid-fueled lull. Job openings rose to historic levels, unemployment fell to its lowest point since the late 1960s and wages grew at their fastest pace in decades as businesses competed for talent.
More than 50 million workers quit their jobs in 2022, breaking a record set just the year prior, attracted by better and ample job opportunities elsewhere.
The labor market has gradually cooled, however.
The quits rate is «below what it was prior to the start of the pandemic, after reaching a feverish peak in 2022,» said Allison Shrivastava, an economist at job site Indeed.
Hiring has slowed to its lowest rate since 2013, excluding the early days of the pandemic. Yet, layoffs are still low by historical standards.
This dynamic — more people stay in their jobs amid low layoffs and unemployment — «point to employers holding on to their workforce along with more employees staying in their current jobs,» Shrivastava said.
Employer «scarring» is a primary driver of the so-called great stay, ZipRecruiter's Pollak said.
Businesses are loath to lay off workers now after struggling to hire and retain workers just a few years ago.
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