When talking about economic recovery, we hear a lot about job creation and hiring workers. But quitting will always be a part of that equation as workers resign and search for something better. And right now, people are quitting in droves. What economists have dubbed the “Great Resignation” presents a serious challenge for policymakers.
While governors across state capitals and partisan policymakers on Capitol Hill argue about what’s best for the labor force, a combination of remote work, unemployment and a sabbatical from normal life has given workers pause to reflect on what they want.
Many have developed a strong preference for remote or hybrid work, while others have burned out from virtual meetings, a lack of child-care, or poor employer support. And for many, that means taking stock of their credentials and skills for different types of new jobs. Between 25 and 40 percent of workers plan to look for a new job once the worst of the pandemic subsides. Fifty-three percent said they’d switch industries entirely if they had opportunities to retrain.
The results are in. Four million people quit their jobs in April, the highest monthly tally in 20 years and double the rate at the peak of the pandemic. In May, 3.6 million people quit their jobs, the third highest reading in 20 years. If trends continue throughout the rest of the year, 2021 will see the highest number of annual resignations since this data has been collected.
Despite witnessing these trends and overseeing a labor force that has shrunk by 3 million over the past two years while a record 9.2 million jobs remain unfilled, America is unfortunately not well equipped to respond. Workforce programs are severely underfunded, there is a persistent lack of equity across the system, lower-wage workers need increased access to career pathways, and there must be a greater priority on technical skills and job training.
The pandemic has also accelerated trends in automation and e-commerce, leading to permanent change in foot traffic and the physical proximity of consumers, sending shock waves across numerous industries. While low-paying and high-turnover industries such as retail and hospitality have been the hardest hit, technology-driven roles such as computer programming, engineering, and advanced manufacturing have seen rising demand.
An increase in skills is not the only thing that workers need. As shifts in labor demand have hurt the most vulnerable workers, there’s been a stronger spotlight on the mentorship, coaching and wraparound support services that are increasingly being recognized as part of a holistic approach to workforce and human capital development.
This support is critical, as women, minorities, less-educated and low income-workers, young people, and immigrants may all need to cope with making more occupational transitions than their peers as the pandemic winds down.
Many employers have responded to this reshuffling of the labor market by offering greater flexibility and nontraditional incentives. Despite this trend, however, benefits may not expand for all, increasing the risk of a second-class workforce.
There’s a role for government in all of these shifts. One way the government can start is greater federal investment in workforce training. Fortunately, there’s a conversation starting in Washington about the federal programs related to workforce development and training.
The Workforce Innovation and Opportunity Act (WIOA), the federal government’s primary vehicle for workforce development programs and initiatives, is massively underfunded and in need of serious reform. Set for reauthorization this year, it presents a strong opportunity for policymakers to re-infuse the country’s workforce system with greater funding and support.
Separately, President BidenJoe BidenPressure grows for breakthrough in Biden agenda talks State school board leaves national association saying they called parents domestic terrorists Sunday shows preview: Supply chain crisis threaten holiday sales; uncertainty over whether US can sustain nationwide downward trend in COVID-19 cases MORE’s American Jobs Plan would also provide a massive infusion of critical resources for training. It lays out a strong plan to build the capacity of the existing workforce system, invest in the technologies of the future, reduce racial and gender inequities, and protect all Americans from the next recession or pandemic.
As part of that, apprenticeships provide a powerful tool to strengthen the workforce and provide workers with pathways into a sustainable middle-class life. The Biden administration has proposed creating 1 to 2 million new apprenticeships across existing and emerging industries. The House of Representatives recently passed the National Apprenticeship Act of 2021 which would provide another strong legislative avenue towards strengthening the apprenticeship system.
The best time to have these skills programs in place would have been before the pandemic when workers could have used the COVID-induced slowdown to retrain and set themselves up for good jobs in the future. The second-best time is now. The call of American workers for a change in their careers or an opportunity to invest in themselves and their livelihoods should be met with a genuine, effective and to-scale response.
As we recover as a nation, we’ve seen what government can do, from getting vaccines in arms to checks in pockets. Now, let’s leverage government to make an equally bold commitment to training workers for the jobs and careers of the future.
Sergio Galeano is an economic policy advisor at Third Way, a think tank based in Washington, DC. Follow him on Twitter: @SergioAGaleano