Analysis: Compliments of the gov't, 'work is now optional'

Analysis: Compliments of the gov't, 'work is now optional'

Analysis: Compliments of the gov't, 'work is now optional'

It's not good news: a record 4.3 million workers quit their jobs in August – and employers are struggling to hang on to the ones that are staying.


"We're definitely in this unprecedented labor market where people are wondering 'Where have all the workers gone?'" says Rachel Greszler of The Heritage Foundation, a center-right think tank headquartered in Washington, D.C. "The quits rates is certainly the highest it's ever been on record – and at the same time we see a record low number of workers being laid off.

"I think it's really just kind of a problematic environment that's out there where there's a culture in which work is optional."

According to Greszler, "a lot of government policies in response to the pandemic" have undoubtedly contributed to this situation.

Greszler, Rachel (Heritage Foundation) Greszler

"[These include] things like the 18 months' worth of unemployment insurance benefits or the ongoing expansions in Obamacare subsidies that have reduced the incentives to work," she explains. "So, I think continuing these policies is only going to make it harder going forward."

Businesses seeing the most workers quitting their jobs are in food and retail industries – making things difficult for those employers.

"I've heard anecdotes of employers who feel like they can't ask the workers who are left to do things to accommodate for the ones that they are not able to hire because they feel like if they asked them to do anything that they don't want to, they'll just up and quit," says Greszler.

"It's really tough out there for employers who are already struggling to meet the demand that's out there and to recover from the pandemic, [because] they simply are not getting the workers they need."

Some people and politicians have shared opinions that businesses need to pay people more to incentivize them to find or return to work. Greszler reports that Heritage has seen wages and total compensation going up, including new benefit packages.

"Certainly that can help, but the problem is that even though wages are rising, the impact of these shortages is feeding through to higher prices for everything that workers are buying," says Greszler. "So, on net, they're not taking home any more money in terms of a higher purchasing power."

It was reported today that average hourly wages rose 4.6% in September from a year earlier – and while that's a healthy increase, AP says it isn't enough to keep up with an inflation rate up 5.4% from where it was a year ago. Those higher prices are outstripping the pay gains many workers are able to obtain from businesses, which are having to pay more to attract employees.