These factors have increased worker bargaining power, with positive wage effects. Even as expanded government unemployment benefits expired in September 2021 (or were never available to begin with for workers who voluntarily quit their jobs), the pace of job switching has continued to accelerate. But workers aren’t just sitting on the sidelines-they are opting to move into new jobs, ones that either have higher wages, safer working conditions, or other factors that make them more appealing. Meanwhile, many of the workers who were never laid off have become burned out, spurring the record-setting number of quits. These jobs are not only among the most dangerous during a viral outbreak (and have been made more difficult by misinformation-driven abuse), they are also among the lowest-paying.Īs companies began hiring people back during the recovery, many workers have not wanted to subject themselves to difficult working conditions and potential safety risks for the low wages that these jobs have historically offered. A large portion of the job churn since March 2020 has been concentrated in frontline services such as accommodation, food services, and retail, which rely on in-person customers and can’t be done remotely. In the COVID-19 recession, that process is playing out in reverse. When workers lost their jobs, they were often forced into lower-paying service sector jobs, which would have significant negative economic impacts on their lives. In past reallocation shocks, job losses were more concentrated among production sector jobs. This has had important implications for the direction of the economy’s reallocation. In March 2020, American University economist Gabriel Mathy correctly predicted that the COVID-19 recession would perhaps be the first service sector recession. However, from the beginning, the COVID-19 recession has been different. In particular, workers who involuntarily lose their job tend to be unemployed for longer, and when they are rehired, they often have significantly lower wages than in their previous job. While this process is necessary for continued growth and increased productivity, it often has devastating economic impacts for the individual people who lose their jobs. Nonetheless, these shocks initiate a process of “creative destruction,” wherein the economy sheds certain jobs and creates new ones, sometimes in different industries and different places. During those periods, voluntary quits tend to crater, while involuntary layoffs tend to surge. These shocks often come in the wake of recessions or significant economic shifts such as job losses from international trade. Historically, workers have more often been hurt by reallocation shocks, during which a significant share of workers permanently lose their jobs, forcing them to move to new companies, new places, or new industries to get rehired. Note: Based on the reason why you quit work, we may have to also review your availability for suitable work.And yet, for the first time in years, this process-playing out against the backdrop of a larger COVID-19-driven “reallocation shock”-actually seems to be directly benefitting workers, in addition to promoting overall efficiency in the economy. You worked full-time and part-time jobs at the same time, and you quit the part-time job – then were laid off later from the full-time job.You started approved training under the Trade Act.You entered approved apprenticeship training.Your employer changed your usual work, and the work now goes against your religious or moral beliefs.You told your employer about an illegal activity at work, and your employer did not stop the activity quickly.You told your employer about a safety problem at work, and your employer did not fix the problem quickly.Your employer changed the location of your job so your commute is longer or harder.Your employer reduced your usual pay or hours of work by 25 percent or more.You needed to protect yourself or immediate family members from domestic violence or stalking.You moved to be with your spouse or domestic partner whose job is outside your labor market area.You became sick or disabled, or a member of your family became sick, disabled or died, and it was necessary for you to quit work.You may qualify for unemployment benefits if we decide you quit for the following good-cause reasons: We'll decide if you are eligible for unemployment benefits based on the facts about your job loss. Can you get benefits if you quit your job?
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