Martha, NPR, Bureau Of Labor Statistics discussed on The Indicator from Planet Money
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Switcher Mar- The job switcher Yup and very lucky Schmid Futures Gers But Martha's not alone. Bureau of Labor Statistics published something called the quits rate. And right now the quits rate is two point three percent which means that two point three percent of. US workers are walking into their boss's office. And saying I quit each month and the majority of them are quitting to take new jobs. That's absolutely higher than it was was a few years ago and that reflects the tightening labor market during the brutal recession. More than ten years ago the quits rate collapsed because the number of available jobs collapsed. Workers couldn't quit to switch jobs because there were no jobs to switch to but as the labor market has recovered in the decades since the quits rate has also gone up but if you take a longer term view it seems like people are still not switching jobs as much as they used to a few decades ago. The Bureau of Labor Statistics has only been calculating the quits rate since the year. Two thousand but Martha says researchers have tried to extrapolate what it would have been back in the late nineteen ninety s and it was much higher back then. Much a little bolder and it is people in all age-groups who were switching less now but as for why they're switching less the answer is we don't really know what I know it's really frustrating you know. This is a measure economists. Talk about fluidity or churn. What it really means is how much things are turning over in the economy and and a bunch of different measures of fluidity or churn have been going down over? The last two decades basically the economy has become less dynamic than it used to be in a number move ways people switching jobs at a slower pace but also a slower pace of new businesses being created each year and people moving less for their jobs but the precise is reason for all. These trends is something that economists are still working on and the pace of job switching really does matter for the overall macro economy for one thing it is a healthy not sign when a lot of workers switched jobs because obviously it shows that there are a lot of job opportunities to switch to but Martha also points to research showing that win. Worker switched jobs. Odd It also causes faster wage growth throughout the whole economy. I think about it this way. People who switched jobs mainly do it for financial reasons. We don't deny by the way there are plenty any of other good reasons why someone might switch jobs like terrible boss or an exciting new opportunity that offers a higher status a chance to expand your network of contacts etcetera her up but overall Martha says a higher paycheck is the main reason and in fact data from the Federal Reserve Bank of Atlanta. Do show that in the past year people who else which jobs have been getting bigger raises than people who have stayed in their jobs so right now wage growth for people who switched jobs is about four point three percent and for those who've stayed stay in their jobs it's about three point three percent but the gains from people switching jobs. Don't just go to the people who take those new jobs. Some of the benefits are shared with people who stay in their current jobs. So if there's someone at your company who quits for a higher paying job and people. At the company start advocating for higher wages. The employer is going to be more likely to listen since they've already seen another worker. Get lured away by higher wages and as for how much quitting your job dear listener can help you. Individually Martha has also looked at the data and research on this and the estimates kind of vary a lot but they show that in general young workers in particular people in their twenties and early thirties. Re Big big wage gains from switching. Jobs the Martha's quick to add that the gains are not just limited to the young so there's some research showing that younger workers Tennessee returns to switching switching jobs but older workers. Don't when you dive into that. That's because younger workers tend to switch jobs because they find a better opportunity elsewhere. Swear older workers ten switch jobs because there's an issue with their old job or even you know for a personal reason like family commitment and so so if you look at older workers who do in fact switch jobs because they find a better job they still see those gains. It's just that they're less likely to be switching for those reasons. This also goes just show that people should not just quit their jobs for arbitrary reasons or even because you might dislike your boss or your teammates or whatever. Hey what are your teammates. The anthem speaking in very hypothetical terms You get the big gains from jobs which ing when you really are leaving for a better job up and switching jobs can bring benefits to especially if the new job represents a kind of promotion like more status in addition to more pay or if the new job is a better fit for somebody skills skills so that worker can produce more or better stuff in their new role. Yeah this is actually something. Economists worry about in recessions is that you know we talk about it as the job ladder but that people have a harder time. Moving up the ladder and improving the match quality of their job. And that's actually something that longer. Recoveries can help workers with that they. Can you better move into a job. That's a good fit for their skills. which puts them in a stronger position when the next recession hits so that's it a decade of jobs reports in the bag? Yeah and what a decade. It's been stacey. Should we celebrate by quitting this sweet. NPR GIG no no way all right It just shouldn't make it clear that we're not GONNA do that. No that's true that's true. We do have a lot of data here that other people quit. NPR and be like. Hey Yeah exactly Netflix call us. That's right Martha Census a lot of research for this episode. So that we use until we couldn't name all of it but please go to NPR dot org slash money and we'll post links to it there. This episode was produced by Lena. Sons Gary in fact check by Naughty Lewis our editors Paddy Hirsch indicator is a production of NPR weekend.