EconExtra is a series of posts that go beyond the textbook, relating current events and recent developments in economics to content standards, and providing resource suggestions to help you incorporate the current events into your lessons. The content in this post could be incorporated into lessons covering several of the EEC Voluntary Content Standards, including 1: Scarcity, 11: Money and Inflation, 13: Income, 15: Economic Growth, 18: Economic Fluctuations, 19: Unemployment and Inflation, and 20: Fiscal and Monetary Policy.

The Headlines

We’ve had the “Great Depression,” the “Great Recession,” and now, the “Great Resignation.” Headlines abound regarding how many people are leaving the workforce. April set a new record for the number of people quitting their jobs, only to be surpassed in July, and again in August, when 4.3 million people, or 3% of the workforce, quit.

• Why are so many Americans quitting their jobs? (NPR)
• The Great Resignation is accelerating (The Atlantic)
• Americans quit their jobs at a record pace in August (NYT-subscription, WAPO-subscription)
• The Geography of the Great Recession-graph below (WAPO-subscription)

The Context

It would be helpful to look at employment data to put these figures in context, comparing pandemic lows to the most recent data.

Setting the stage on the employment numbers can be a bit confusing, as the Bureau of Labor Statistics published data from two sources: the Payroll survey—from employers, and the Household survey—from the employee side. The following figures are from the current and past Household survey data releases (seasonally adjusted).

• At the peak of the pandemic, over 23 million people were out of work.
• The ratio of employed people to the population dropped by 10 percentage points (from 61% to 51%).
• As of September, 7.6 million are still considered to be unemployed.
• As of September, an additional 6 million are not counted as unemployed because they aren’t actively looking for work at the moment, but want to work.

What we don’t know is how many of the huge numbers of people quitting may be included in that last figure of 6 million. Anecdotally, people who have quit recently may be taking advantage of having savings in the bank and nothing pressing to be looking at other work options. Some may be getting additional training to facilitate a change in career. And some may be looking to start their own businesses. Not all of those people quitting are retiring, and there is nothing to say that those who are retiring early will not at some point come back to work again, perhaps doing something else.

The number of job openings was 10.4 million in August, down from a record high of 11.1 million in July. If all of the 7.6 million counted as unemployed, and some or all of the 6 million who claim to want to work actually start looking, it appears that those job openings could be filled, but will they be?

Ben Carlson looks specifically at many measures of the financial health of the economy in general, focusing on the more positive outcomes of the government fiscal stimulus. About the Great Resignation, Carlson writes:

People don’t typically quit their jobs voluntarily unless they have better prospects elsewhere or a nice financial cushion. Most people are quitting because labor finally has the upper hand to find better-paying or remote jobs elsewhere. ( A Wealth of Common Sense)

In his blog post, Barry Ritholz also discusses the drastically changing job market, where some of this change may be driven by impending automation, but much has been driven by the pandemic, or enabled by the fiscal response to it.

These next two posts from the St. Louis Fed dig into the data:

• The first breaks down who is leaving the labor force.
• The second post looks at who and how workers are re-entering the workforce.

The Assignment

1) Have students read one of the headline articles and provide them with the whatever current employment data and graphs you feel necessary to provide context.

2) Have students read the two articles analytical articles above (they are short) and reference the St. Louis Fed posts/data.

3) Based on this reading, have students answer the following suggested questions.

Who is quitting?

            Is there a specific demographic or industry that is experiencing a higher rate?

Why are they quitting now?

            What fiscal measures may be supporting their decision to quit?

What are they doing instead?

What are the impacts on the economy of having so many jobs going unfilled?

How do you see the current employment situation resolving or ending?

About the Author

Beth Tallman

Beth Tallman entered the working world armed with an MBA in finance and thoroughly enjoyed her first career working in manufacturing and telecommunications, including a stint overseas. She took advantage of an involuntary separation to try teaching high school math, something she had always dreamed of doing. When fate stepped in once again, Beth jumped on the opportunity to combine her passion for numbers, money, and education to develop curriculum and teach personal finance at Oberlin College. Beth now spends her time writing on personal finance and financial education, conducts student workshops, and develops finance curricula and educational content. She is also the Treasurer of Ohio Jump$tart Coalition for Personal Financial Literacy.