December proved to be an incredibly disruptive month for the labor market.
Parents scrambled to navigate their work lives as schools and day cares closed due to growing virus cases. Employees grappled with sudden outbreaks at work, with little of the social safety net protections or pandemic-controlling measures that helped cushion the blow from earlier waves. And the vaccine-evading omicron variant shook the nation’s confidence that a future without the virus was on the near horizon.
These forces magnified the desire for many workers to quit their jobs. At least 4 million workers resigned each month during the second half of 2021, with many of them departing to find work that had better pay, better benefits or more flexible schedules.
While the pandemic initially was marked by mass joblessness — more than 20 million people lost their jobs in its earliest days, many temporarily — 2021 was defined by a strong labor market recovery as well as complaints by employers about difficulty finding available workers.
That shortage has meant that many companies have been racing to compete with each other for workers, raising wages, adding cash bonuses and sweetening the pot in other ways to try to attract applicants. And that in turn has created a climate for workers to have more leverage and options than at perhaps any other time in recent history.
Nick Bunker, an economist at the jobs site Indeed.com, said that the data showed that the omicron did not have a big effect on demand for workers in December.
“It really paints this picture of a job-switching boom,” he said.
The firm’s own data on the volume of job postings showed that the bigger omicron hit took place in January, he said. That’s when a record number of Americans missed work because they were sick or they were taking care of people who were sick.
Industries with the highest levels of workers quitting or leaving for other jobs in December were accommodation and food services, with 6.1 percent of workers quitting, retail (with 4.9 percent quitting), trade, transportation and utilities (3.8 percent) and professional and business services (3.7 percent).
The percentage of workers who were laid off in the month also reached a record low in the 20-plus year history of the survey, at 0.8 percent, an indication that employers were holding tightly to workers amid the recent shortages.
“The labor market has given many people more opportunities but provided security for people who do have a job,” Bunker said. “Anyone who had a job in December was less likely to have lost it than any previous time over the last 20 years.”
Amanda Jenkins, 38, of Orlando, left her job to start a new position as a clinical research coordinator at a hospital in December.
Her motivations ran slightly against the grain: She had grown tired of working remotely, for a university hospital in Colorado, after moving to Florida for her husband’s job before the pandemic. She said she wanted a position that would allow her to work in person again.
So when her daughter’s schooling schedule finally smoothed out last summer, she began looking for work locally.
It was no cake walk, she said. She sent out dozens of applications, finding many jobs with subpar pay at local universities before finally landing one she liked. Still, she thinks the position is going to be better than her previous one. The pay is better, she enjoys her co-workers and despite a brief interlude working remotely again part time because of the omicron surge, she hopes to be working in person full-time in the near future.
“I desperately missed human interaction,” she said. “It was so isolating, and even if I could get my job done, I lost all enjoyment for it.”
The Bureau of Labor Statistics’ monthly Job Openings and Labor Turnover survey captured a record number of workers quitting or switching jobs four times in 2021. The volume of job openings, too, surged to new highs during the year.
The number of unemployed workers per job opening remained at or near a record low, with more than 1.7 jobs for every unemployed worker. Julia Pollak, an economist at ZipRecruiter, said the number of job listings in January amounted to 55.8 percent more than pre-pandemic averages. In other calculations that show how much the pandemic has upended traditional economic patterns, layoffs now amount to just 20 percent of overall separations, about half of what was typical before March 2020, Pollak said.
“It shows that before omicron we had the best job seekers’ market ever, and it just kept growing more and more favorable for workers,” she said. “Workers have more job security than ever before.”
Wages also have risen steadily, as another reflection of the tight labor market, but so far the gains have largely been negated by inflation. The continued threat of the coronavirus, particularly for in-person work, continues to complicate employment options, as well.
The labor market had one of its most impressive years of growth ever in 2021, averaging more than 500,000 jobs added a month, but the United States still has more than 3 million fewer jobs than it had before the pandemic.
There are also concerns that omicron’s rapid surge, which picked up momentum in December, could have dampened or completely erased any growth in the labor market for the first month of the new year.
Census data from the first 10 days of January showed 8.8 million workers reporting missing work because they were sick or caring for someone who was — a substantial portion of the labor force, complicating business efforts to stay open for business.
Consumer demand has also appeared to be waning in some sectors. Restaurant traffic, which had recovered last fall to at or above pre-pandemic levels, dropped off around the surge, according to data compiled by the financial analysis company IHS Markit. Airplane travel, which had staged a similar recovery, also made a significant decline, according to the firm’s data.
“The reduced activity in restaurants and in air travel … corresponds pretty cleanly with the spread of omicron,” said Ben Herzon, executive director at the firm.
Another wrinkle has been the more than 2 million people who have left the labor force entirely, dropping out to care for family members or children with schools and day cares in disarray, or prompted into early retirements. Economists hope that conditions align to prompt some of those people back to the labor force and increase the country’s participation rate, but it is extremely unlikely that happened during the latest surge.
However, some of those trends may be reversing themselves, as the omicron surge lessens in many parts of the country. Sunday saw the first positive night of restaurant diners when compared with pre-pandemic levels since December, according to OpenTable data.
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