United States: the great resignation

According to a Goldman Sachs research note, over 38 million Americans quit their jobs last year. Last November alone, 4.5 million employees quit their jobs. While high labour market “rotation” is normal in the US, resignations have reached a record high in 2021 and are, according to Goldman Sachs economists, a “long-term risk” to the US economy. What has happened since the start of the pandemic? First, the employment participation rate has fallen from 63.4% before the crisis to 61.9% by the end of 2021, or about 3.6 million fewer jobs. This is explained by retirements, women who did not return to work after the pandemic and a new phenomenon, the “great resignation”. The latter is characterised by massive departures which are mainly concentrated in traditionally low-paid service sector jobs. Around 20% of these departures concern the hotel and catering industry, 18% sales, 13% health and, finally, 17% other service sector activities. It should be noted that 40% of these people resigned without finding a new job. The Atlanta Federal Reserve has highlighted an interesting factor concerning salaries. Indeed, the pay of those who changed jobs in 2021 increased by 5.3%, while those who remained in their jobs saw their salaries increase by only 4.1%. The US government sees these movements in the labour market as positive and describes them as a “great upgrade”, meaning that the lowest paid employees in the country now have access to better paid jobs. But this trend is also resulting in labour shortages, increasing bottlenecks and, above all, a sharp rise in low wages in a context of accelerating inflation. Financial authorities are now concerned about a general wage inflation which should result in interest rates rising faster than expected.