Getting The US Back To Work

A record high of 4.3 million workers, across industries, quit their jobs in August. With 10.4 million job openings, workers in the current labor market environment have the bargaining power. 

Businesses are having to evolve to attract and retain talent. In what has been coined "The Great Resignation", companies have had to increase pay, benefits, engagement, and flexibility to stay competitive in this new marketplace.  

When work makes up such a large portion of an employee’s life they want to feel valued, appreciated, and that their job matters. This has been particularly true for women, whose participation rate has been hit hard during this pandemic. Prior to the Global Financial crisis, female labor force participation had spent the last half-century climbing from close to 30% to above 60%. However, the financial crisis set the participation rate back a decade or so. The participation rate had just begun recovering again in the last few years when the pandemic hit. The recent pandemic-driven setback has brought the female participation rate to levels we haven’t seen since the late 1980s. Childcare has been a major issue for working women trying to navigate the pandemic, something that has personally impacted me throughout the last 18 months. Female labor force participation is important for a variety of reasons—increasing potential GDP of the US economy to name one.

This new environment is likely to increase the quality of life for many workers, improve corporate cultures for those willing to evolve, and potentially increase worker performance and productivity. However, increased labor bargaining power has also historically been an inflationary signals for the economy. This will especially be true if higher wages don’t seem to be enough to pull workers back into the labor force. We will be watching these data points closely. 

What do you think of this new labor market environment? We would love to hear from you.