Worker Retention

In November, quits remained higher than pre-pandemic, as workers pursued better wages and working conditions in a strong job market.

Quits rate by industry

Dec 2000 - Nov 2022

Source: Bureau of Labor Statistics. Notes: The quits rate is the number of quits during the entire month as a percent of total employment. Quits include employees who left voluntarily except retirements or transfers to other locations. Data is seasonally adjusted. Nov 2022 data is preliminary.

Enabled by a strong economy and a tight labor market, more than 4 million workers quit jobs in November 2022 in pursuit of better jobs. The job quits rate was highest in leisure and hospitality (5.4% in November) and in retail (3.9% in November) where wages are typically low. A groundswell of grassroots activism has led to increased worker organizing across Starbucks and Apple stores, as well as Amazon warehouses.¹ In addition to higher wages, greater union membership could contribute to more stable employment and reduced churn in the labor market over time.²

But these gains could be undercut as the Federal Reserve works to tame inflation by dramatically increasing interest rates with the intention of reducing demand and increasing unemployment.³ When unemployment increases, low-wage workers historically bear the brunt of job losses. Moreover, recent inflation has been driven by several factors including supply chain breakdowns and corporate profits surging – neither of which will be corrected through rising interest rates (Corporate Profits).⁴ The Inflation Reduction Act and the CHIPS and Science Act aim to reduce inflation by addressing supply chain issues, while containing key healthcare costs.⁵ Inflation grew more slowly in the last half of 2022 and actually decreased in December 2022 to an annual rate of 6.5% — down from a high of 9.1% in June 2022.^6,7

1. “The Fed May Finally Be Winning the War on Inflation. But at What Cost?” Steinberger. The New York Times Magazine. January, 2023. https://www.nytimes.com/2023/01/10/magazine/inflation-federal-reserve.html

2. “Unions are having a moment. Here’s how that can be good for labor and business.” Katz. The Scheinman Institute. April, 2022. https://www.ilr.cornell.edu/scheinman-institute/blog/outreach/unions-are-having-moment-heres-how-can-be-good-labor-and-business 

3. “Federal Funds Effective Rate”. FRED. https://fred.stlouisfed.org/series/FEDFUNDS

4. “Wages and Employment Do Not Have To Decline To Bring Down Inflation”. Schweitzer, Khattar. Center for American Progress. September, 2022. https://www.americanprogress.org/article/wages-and-employment-do-not-have-to-decline-to-bring-down-inflation/

5. “FACT SHEET: The Inflation Reduction Act Supports Workers and Families”. The White House. August, 2022. https://www.whitehouse.gov/briefing-room/statements-releases/2022/08/19/fact-sheet-the-inflation-reduction-act-supports-workers-and-families/ 

6. “Consumer Price Index”. U.S. Bureau of Labor Statistics. https://www.bls.gov/cpi/#:~:text=News%20Releases,-CPI%20for%20all&text=In%20December%2C%20the%20Consumer%20Price,over%20the%20year%20(NSA).

7. “Consumer Price Index up 7.1 percent over the year ended November 2022”. U.S. Bureau of Labor Statistics. December, 2022. https://www.bls.gov/opub/ted/2022/consumer-price-index-up-7-1-percent-over-the-year-ended-november-2022.htm