What to say when someone tells you ‘people don’t want to work right now’

A sign reads "We all quit" at a Burger King in Nebraska
  • As stories about labor shortages continue to pop up, it might seem like no one’s working.
  • The truth, of course, is far more complicated – just like the strange economy right now.
  • Importantly, the pandemic is still ongoing, and workers have a lot more options.
  • See more stories on Insider’s business page.

It’s a common refrain right now: No one wants to work. It’s a twist in the story of a not-quite-post-pandemic economy that left millions of people unemployed, as understaffed businesses struggle to hire and workers quit en-masse.

But, as always, the economy is complex, and so are the myriad of people who keep it running. A simple phrase doesn’t capture all of the complexities of why people may or may not be working. If you want to inject some nuance into your next conversation about the labor shortage, here’s what to know.

The pandemic is still going on

If the Delta variant has taught us anything, it’s that COVID is still spreading – and it’s still impacting the economy.

For instance, childcare – or lack thereof – has emerged as one potential driver keeping parents out of the workforce. With schools and daycares shuttered, some parents left their jobs to provide care. Others may have lost their roles, and delayed searching for new ones while their kids were at home. Either way, they may not have returned to the workforce yet.

Sociologist Jessica Calarco tweeted recently about the challenges facing parents as children remain unvaccinated and variants spread, noting that classrooms and daycares may have to temporarily shutter as cases come up.

“Given that kids aren’t going to be eligible for vaccines any time soon, and with Delta spreading rapidly, we should expect a whole lot more of this to come. I won’t be surprised if we end up with a whole bunch more 2-week gaps (or longer) in childcare this fall,” she wrote.

COVID fears have also kept some older workers out of the workforce. They were disproportionately impacted by job losses early in the pandemic, and some have called it quits and retired altogether.

Fed Gov. Lael Brainard said that labor shortages should fade by fall as schools reopen and fears abate, along with federal unemployment benefits.

Workers are taking advantage of more options

A huge amount of workers are quitting their jobs, which seems counterintuitive. In May, 3.6 million workers quit their jobs – but it may be because they are taking advantage of new opportunities.

Wages in industries that are having difficulty staffing up – like leisure and hospitality – are on the rise, but they’re still relatively low compared to other fields. Dr. William Spriggs, an economics professor at Howard University and chief economist at the AFL-CIO, previously told Insider that “workers who are employed are finding ways to get jobs in the sectors that are expanding and hiring.” Those sectors might offer higher wages, or at least more consistency than their prior roles.

It’s what Insider’s Aki Ito calls The Great Reshuffle: An unprecedented labor market, coupled with a rethinking of what workers want out of both work and life, has led many to exit their positions or seek out new ones. The market out there for workers is competitive, and many are finding higher salaries or better positions as they depart their old roles.

And yes, some workers may not be returning because they’re benefiting from enhanced unemployment benefits. As Insider previously reported, the consistent pay from unemployment – as well as the fact that it’s higher than what some workers made before – has caused some to rethink work.

“I just think that UI has just at least fixed everyone’s brain enough to see how f—ed up the wages are,” Matt Mies, an unemployed 28-year-old, previously told Insider.

But, as always, the picture is still nuanced. Many workers will find themselves cut off completely – including those who have been frantically searching for work.

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More people are telling their jobs to ‘shove it’ amidst record quits

A sign at a McDonalds Drive-Thru explaining why a worker quit their job
The sign was apparently posted in Louisville, Kentucky.

  • The “take this job and shove it” indicator is high due to lack of childcare, covid fears, and migration.
  • DataTrek looks at how many job separations come from quitting, and told Insider “employers are not raising wages enough.”
  • But it may come down soon as schools reopen and more people reenter the labor force.
  • See more stories on Insider’s business page.

In May 2021, workers were still quitting their jobs in droves – yet another strange facet of the slowly recovering economy.

According to recently released data from the Bureau of Labor Statistics, 3.6 million workers quit their jobs in May, a month when there was one available worker for every job open (and there were 9.2 million jobs open). In April, the quit number was a record-breaking 4 million.

DataTrek Research has its own tracker for how many of the job separations in a month were from quits – the “take this job and shove it” indicator. That indicator reached its second-highest rate recorded in May 2021, with 67.8% of job separations driven by quits.

This number was higher in the particularly quit-heavy leisure and hospitality industry, Axios first reported; it came in at 76.4%.

The number is still slightly lower than April’s record-breaking high of 68.8%. Jessica Rabe, DataTrek’s cofounder, told Insider that quits are still driven by reduced access to childcare and fears of infection. Also significant: Workers relocating to the suburbs from urban centers.

But quits – and the “take this job and shove it” indicator – may have peaked in April. Schools are set to reopen in the coming months and enhanced unemployment benefits ending could get more people back in the labor force.

“We think the bulk of people disenfranchised by their jobs have quit by now, given this difficult nature of the pandemic over the last year,” Rabe said. “We think the only caveat is if the Delta variant or others do take off and we get another raft of workers in customer service jobs quitting their jobs again, even with higher wages, but it won’t likely be as big as the first wave.”

Yes, wages are on the rise

That reading comes as leisure and hospitality workers say they’re not going to return to their previous positions. Insider’s Grace Dean reports that a third of hospitality workers said in a Joblist survey that they won’t ever return to the industry.

Those respondents want a new work experience, along with higher wages and better benefits. That’s not to say that leisure and hospitality isn’t growing: The sector made up 40% of jobs gains in June, according to the Bureau of Labor Statistics, and added 343,000 payrolls. Wages also grew for leisure and hospitality workers at a breakneck speed, soaring 7.1% in the past year.

Even so, the quits rate in leisure and hospitality was 5.3% in May. That could be due to those wage hikes raising low wages to just slightly less low. In June, the average hourly earning for nonsupervisory private employees was $25.68. It was nearly $10 lower for leisure and hospitality workers, coming in at $16.21.

Those conflicting numbers show a strange new pandemic trend: High unemployment, coupled with high job openings. Generally, unemployment is driven down as job openings go up – since people are presumably filling those roles. That doesn’t seem to be happening here.

“The large labor shortage and elevated quits rate also shows employers are not raising wages enough,” Rabe said, “which is constraining hiring.”

Read the original article on Business Insider