By Matt Lundy* – Oct, 2021
Stories abound of workers who simply had enough – say, the stressed-out waiter who turned a passion project into a small business, or the overworked lawyer who quit to recharge, indulge in hobbies and spend time with family. Some commentators have dubbed it the “Great Resignation,” a collective rush for the workplace exits.
But those anecdotes, while true, don’t add up to much of a trend in Canada – at least, not yet. There is little evidence to suggest that people here are resigning en masse. Instead, it appears that Canadians are exercising some caution as the economy recovers from the worst shock in generations.
“It doesn’t look like we’ve seen a huge wave of resignations,” said Brendon Bernard, senior economist at job-search portal Indeed Canada. “We don’t have any hard data in Canada to really show that there’s a sustained upswing in employed workers voluntarily leaving their jobs – at least more so than normal times.”
There are several metrics pointing to that conclusion.
For starters, the job-switching rate – or the proportion of workers who remained employed from one month to the next, but who changed their jobs – is mostly lingering below prepandemic norms, according to Statistics Canada.
The share of adult Canadians (age 15-plus) who voluntarily left jobs within the past month and didn’t immediately resume working is on the rise, suggesting that quitting has become marginally more popular since 2020. But the proportion of people in that situation is still roughly in line with 2019 levels, according to an analysis from Mr. Bernard.
There are plenty of reasons a person might want to quit a job, such as to attend school, or to take care of children. Statscan’s Labour Force Survey allows respondents to indicate they were “dissatisfied” with the jobs they left. Among the newly jobless who left work, dissatisfaction is now more common than it was early in the pandemic – but again, it hasn’t soared beyond 2019 levels.
As is often the case with Canadian economic data, there are gaps that complicate the picture. For instance, Canada doesn’t have a dedicated employer survey on labour turnover, like the U.S. does.
The U.S. numbers suggest a very different situation is playing out. In August, 2.9 per cent of American workers (or 4.3 million people) quit their jobs, the highest share ever recorded in data that go back two decades. The quits rate was especially high in the hard-hit retail (4.7 per cent) and hospitality (6.8 per cent) industries.
A high rate can be a good sign. “They refer to that as the ‘take this job and shove it’ indicator,” said Claudia Sahm, senior fellow at the Jain Family Institute, and a former White House and Federal Reserve economist. “People can’t do that unless they have something lined up, generally.”
Job churn is typically a sign of a healthy labour market, helping workers to pocket better wages. And while the U.S. is hardly the picture of health – millions have dropped out of the labour force, contributing to fears of long-term economic damage – hiring conditions are tight. There are more job vacancies than unemployed people.
That dynamic has created a golden opportunity for workers to secure better pay and conditions. Wage growth for job-switchers is running near the highest rates of the past decade, according to the Federal Reserve Bank of Atlanta.
It’s instructive to look at who is shaking things up, Ms. Sahm said. The U.S. job-switching rate has accelerated beyond prepandemic levels for vulnerable groups, including young people under 25 and non-college graduates. But the upturn in switching has not been nearly as dramatic for those with postsecondary degrees, or for older individuals.
“There is this narrative that COVID has created this big epiphany [and] soul-searching about what kind of job you want to have,” she said. “I would buy into that story a little more if you saw that in the professional class,” with quits rates going up a lot. “This is not well-off people reimagining their lives,” she added.
It may simply take time for Canada to exhibit more signs of labour churn. A recent Bank of Canada survey found people are growing more confident in the job market. When asked about the probability of leaving a job voluntarily in the next year, the median respondent said there was a 19.2-per-cent chance of that happening, the highest since the survey began in 2014.
“This suggests that some people are more willing to change jobs now that the economy has reopened and vaccination rates have increased,” the bank said. “It could also reflect pent-up demand for changing jobs. That is, some workers may have delayed looking for a different job while labour markets were weak earlier in the pandemic and when people were more concerned about the virus.”
The need to find new work – potentially in a different field – was foisted upon many people. Millions of Canadians were laid off during the pandemic, and many industries were operating at reduced capacity for more than a year. So while resignations appeared light, structural changes were still happening in the labour market. In an extreme example, hospitality jobs are nowhere close to a full recovery, while technology positions are more numerous than ever.
“It’s hard to picture those two developments happening without at least some form of career-switching,” Mr. Bernard said.
*Matt Lundy is an economics reporter for The Globe and Mail’s Report on Business section.
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