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Resignation and retention in the labor market


It sounds like giving up, and I guess in a way it is.

I refer to the Great Resignation—the huge number of people who are quitting their jobs, a trend triggered by the pandemic.

It’s not over. In September, 3 percent of the American work force left their jobs, according to a column by “Bartleby” in this week’s Economist.

Not everyone agrees about the meaning of this statistic. Peter Cavelli, professor of management at the Wharton School of Business, contends, “The idea that people are quitting all over the place is not true.”

“If you look at the data on turnover by month, and you look at July 2021, during the summer when all this talk about the Great Resignation started, the turnover rate was 2.7% per month. If you look at July 2019, it was 2.4%,” Cavelli says. “We went from 2.4% to 2.7%. At the moment, it’s up to 3%. It’s not a huge jump compared to where it was in 2019.”

Wages have risen less than inflation, Cavelli adds, meaning that real wages have fallen.

In any case, the situation has reversed from the period between the Great Recession, when “the labor market was really bad for employees but great for employers,” in Cavelli’s words, to the different dynamic of the pandemic.

In the produce industry, labor continues to be the number one concern.

Dick Peixoto, owner of Lakeside Organics Gardens, LLC, BB #:155561 in Watsonville, CA, says, “We’ve raised our rates, but that doesn’t seem to bring people on the farm.”

He notes a cycle whereby laborers go into construction work when it is available and return to the farm when it is not.

This is good laissez-faire economics: construction pays better than agriculture. (In construction, “the quit rate . . . hasn’t changed,” according to Cavelli.) But it doesn’t help the employer who needs a steady, reliable supply of labor for crops that are extremely perishable and time-sensitive.

Bartleby has some suggestions for navigating this situation. Benefits like health care have become central. One recent survey indicated that health concerns were the primary reason people with no more than a high-school education quit their jobs.

In terms of flexible work, “the split between office and home is what counts,” says Bartleby. “For blue-collar workers, single parents especially, scheduling matters—when their shifts start and end, and how much leeway they have to manage their time.”

That means avoiding arbitrary last-minute changes in schedule.

Other suggestions include thinking harder about career paths for entry-level employees, particularly in regard to their actual skills, and crafting strategies for finding new workers.

It’s a management truism that employees cost more to hire than to retain. Theoretically, then, an employer would never want anyone to quit.

But, of course, that’s not going to happen. And, even apart from the inevitable losers whose riddance is richly welcomed, there is innate value in adding new blood to a staff to generate fresh energy and ideas.

“People are like water,” quips Bartleby: “there is such a thing as too much retention.”


Richard Smoley, contributing editor for Blue Book Services, Inc., has more than 40 years of experience in magazine writing and editing, and is the former managing editor of California Farmer magazine. A graduate of Harvard and Oxford universities, he has published 12 books.