PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Tight Labor Market: Job Openings and Quits Remain High

By at 10 March, 2022, 11:29 am

by Raymond J. Keating –

The tightness of the labor market was made clear in the latest “Job Openings and Labor Turnover” report from the U.S. Bureau of Labor Statistics. Even with the data basically unchanged in January, both the level of job openings and quits remained quite high.

The following chart shows total nonfarm job openings. Look at the incredible rise after the pandemic first hit to record levels – far above pre-pandemic numbers – with a data set going back to the end of 2000.

Source: Federal Reserve Bank of St. Louis, FRED

Also quite breathtaking are the number of quits, as noted in the chart below. Again, even with a drop in January 2022, these levels are far above what prevailed pre-pandemic. As SBE Council has previously noted, quits are widely considered to be an indicator of confidence among workers in terms of the jobs market, or where it is headed.

A high number of quits reflects wide confidence that another job has been secured or is available.

Source: Federal Reserve Bank of St. Louis, FRED

Finally, feeding into the tight labor market given the number of job openings are both an immigration system that does not provide adequate legal avenues for those willing to work and contribute to our nation, and second, among those in the nation, the labor force participation rate (62.3 percent in February 2022), though rising in recent months, remains below pre-pandemic levels (63.4 percent in February 2020), never mind where it stood before the 2008-09 recession (for example, 66.0 percent in November 2007).

As survey after survey shows, employers – very much including small businesses – need workers seemingly at all skill levels, and have been increasing pay and assorted benefits to get quality employees on board.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

 

News and Media Releases