Leisure, Hospitality Workers Quitting at Twice National Rate

By Tom Ozimek
Tom Ozimek
Tom Ozimek
Reporter
Tom Ozimek has a broad background in journalism, deposit insurance, marketing and communications, and adult education. The best writing advice he's ever heard is from Roy Peter Clark: 'Hit your target' and 'leave the best for last.'
November 13, 2021 Updated: November 14, 2021

Recent government data on the labor market is providing fresh insight into the so-called Great Resignation, with the figures showing that workers in sectors with a lot of face-to-face interaction with other people, such as in accommodation and food services, were quitting their jobs in September at record or near-record numbers and at over twice the national rate.

The Labor Department’s Job Openings and Labor Turnover Survey (JOLTS), released Nov. 12, showed that a total of 4.4 million U.S. workers quit their jobs in September, a record high. The so-called quits rate, which reflects worker confidence in being able to find a better job, also rose to a record high of 3.0 percent, painting a picture of labor market tightness and growing pricing power of workers.

But the quits rate in several industries—leisure and hospitality (6.4 percent) and accommodation and food services (6.6 percent)—came in at over twice the national rate and at levels at or near their respective record highs.

“The number of job openings in late September remained extraordinarily high at 10.4 million,” Bankrate Senior Economic Analyst Mark Hamrick told The Epoch Times in an emailed statement. “At the same time, the so-called Great Resignation continued to reach new heights, with 4.4 million people quitting their jobs with leisure and hospitality leading the way.”

Of the 4.4 million workers quitting, 863,000 were in accommodation and food services, and 987,000 were in leisure and hospitality.

The Labor Department’s quits data comes as businesses continue to report difficulties attracting workers, raising wages, and offering perks to bring in badly needed staff.

The National Federation of Independent Business (NFIB) said in a Nov. 9 report that a net 44 percent of small-business owners reported boosting wages to attract and retain staff, the highest reading in the 48-year history of the series.

“This remains an opportune time for people to look for employment, while demand for workers remains high. For many employers, the struggle continues,” Hamrick said.

The recent JOLTS report also highlighted the mismatch between the near-record 10.4 million job openings and the official number of unemployed people in the United States, which the Labor Department said in an earlier report (pdf) amounted to 7.4 million in October.

Treasury Secretary Janet Yellen on Nov. 12 weighed in on the labor market dynamics and commented on the mismatch.

“Spending is strong and the supply of workers is not back up to normal,” Yellen told CBS’ “Face the Nation” in an interview that aired Nov. 14. “We have a tight labor market.”

“Unemployment is low and labor force participation is quite depressed relative to pre-pandemic levels,” she said. “Labor supply is abnormally low, I believe, because of the pandemic.”

The labor force participation rate, a measure of people working or actively looking for work, has been stuck at a historically depressed level. The Labor Department’s most recent jobs report, released Nov. 5, showed the labor force participation rate in October stood at 61.6 percent, unchanged from September but well below the pre-pandemic level of 63.6 percent in February 2020, and far off the historical peak of 67.3 percent in April 2000.

While the reason for the lagging labor force participation rate isn’t immediately clear, economists have cited COVID-19 fears among employees returning to the office, government assistance programs and policies, the stress of the pandemic prompting a spike in retirements and resignations, along with a lack of access to affordable child care.

“I think part of it reflects concerns about COVID and exposure to COVID, especially in jobs that involve public-facing activities,” Yellen said.

Another reason for what she called an “abnormally low” supply of labor was a shortage of child care workers and educators, which “creates child care problems.”

“That also tends to suppress labor supply,” she said.

In October, the unemployment rate edged down by 0.2 of a percentage point to 4.6 percent. At the same time, U.S. employers added 531,000 jobs in October, the largest gain in three months.

Tom Ozimek
Reporter
Tom Ozimek has a broad background in journalism, deposit insurance, marketing and communications, and adult education. The best writing advice he's ever heard is from Roy Peter Clark: 'Hit your target' and 'leave the best for last.'