The U.S. labor market has been out of whack as the country has started to open up amid this new normal, though the threat of COVID-19 hasnt gone away with the Delta variant causing a rise in cases nationwide.
Regardless, low-wage workers in several industriesthink those that dont offer up the luxury of working from homeare saying good riddance and finding better paying jobs.
In the latest Job Openings and Labor Turnover Summary from the Labor Department released in early July, the quits level decreased to 3.6 million (a rate of 2.5%) in May after 4 million people voluntarily left their jobs in April.
Job openings remained comparable from April to May, dropping from a record 9.3 million to 9.2 million month-over-month, meaning people leaving their jobs have plenty of opportunities to find new gigs.
Why are people quitting their jobs?
Aside from looking for better pay, there are a handful of other common reasons people are quitting their jobs and searching for new ones (or not!):
- Fear of unsafe working conditions as COVID-19 continues to be a concern
- A desire to continue working remotely as some companies are reopening offices and forcing employees to return to in-person work
- Prioritizing life over work in the delicate work-life balance, i.e. Work sucks, I know.
Desperate companies offering sign-on bonuses
Sign-on bonuses are typically reserved for extremely competitive jobs, like maybe the most literally competitive field: professional sports.
But in June, almost 1/5 of jobs posted on ZipRecruiter were offering sign-on bonuses, compared with just 2% of listings in March.
Many companies, especially those in blue-collar industries like food services and manufacturing, are starting to offer sign-on bonuses as they struggle to find workers.
Amazon, for example, is offering new warehouse team members a $1,000 sign-on bonus, plus an additional $100 bonus with proof of COVID-19 vaccination.
So sure, Jeff Bezos is heading to space next week, but with an extra $1,100, you can maybe afford to pay your rent or move closer to becoming debt-free by making a sizeable credit card payment.
Companies are starting to get the hint on increased wages
Amazon raised its minimum wage to $15/hour in 2018, but it seems to have taken until this post-pandemic moment for other companies to catch up. Business is ramping up, but companies are struggling to hire workers at a bare minimum. The federal minimum wage has remained at just $7.25 since 2009, and American workers are starting to understand their value, moving on from jobs that dont pay a living wage.
The reservation wage, which is the average lowest wage an unemployed person in the U.S. would accept for a job, jumped from $23.45 in March 2020 to $29.56 in March 2021 among Americans without college degrees, according to Business Insider. Thats a 26% increase year-over-year.
Companies like Walmart, Target, and UnderArmour have increased their minimum wage in the last year, following in Amazons footsteps. But even Amazon, which has had its fair share of complaints for grueling and unsafe working conditions, has a long way to go to close the gap between its minimum wage and the reservation wage.
Can you believe the best way to get people to want to work for you is to pay them more? Go figure.
Sources:
-Business Insider
Casey Musarra
Casey is a reformed sports journalist tackling a new game of financial services writing. Mike Francesa once called her a great girl.
