Improving 'Quits Rate' Shows Workers Have More Confidence in Job Market

Five years into recovery from the Great Recession, the economy is still too weak to stimulate the kind of dynamic labor market in which workers routinely move from one employer to another, building their careers and bank accounts and advancing the nation's long-term growth prospects.

But that's beginning to change, according to data from the U.S. Bureau of Labor Statistics that show job mobility has begun to accelerate along with a steady pick-up in hiring and an increasing number of job openings.

In the Midwest region, the so-called “quits rate,” or the percent of workers who voluntarily quit their jobs in a given month, was 1.9 percent in May. That's just shy of the 2.2 percent monthly rate that is typical of a healthy economy, said Thomas Traynor, a labor market economist at Wright State University.

By comparison, the quits rate during the worst months of the recession fell as low as 1 percent, according to the BLS, which has been tracking the quits rate since December 2000.

“Some people quit because they already obtained a better job…so these types of quits are rising because of improved job prospects,” Traynor said. “An increase in quits by people who don't have another job secured is also an indication that better jobs outside of workers' current employers are increasingly available. Either way, the upshot is that prospects for better jobs for workers appear to have improved from the low point of the great recession, but are not back to a level we would see in a fully recovered economy.”

Last month, the U.S. unemployment rate fell to 6.1 percent — the lowest rate since September 2008 — as nonfarm payroll employment rose by 288,000. U.S. employers have added more than 200,000 jobs a month for the past five months, the first time that has happened since the period from September 1999 to January 2000.

In Ohio, unemployment held steady at 5.5 percent last month, but nonfarm payrolls rose by 12,700 — the second-highest monthly job gain so far this year, according to figures released by the state jobs department Friday.

But even as labor market begins to loosen up, overcoming the psychological barriers that have kept some people pinned down in their current jobs will take time, said James Brock, a Miami University labor expert.

“When times were tough, nobody in their right mind would quit a job because there was no assurance you could get another one,” Brock said. “It's traumatic to need a job and not be able to find one, so people who have jobs really want to hold onto tight to what they have. As the economy improves, that will slowly work on people's psychology and those traumatic times will sort of recede in people's memories. But a lot of people have gone through a lot of pain and trauma over the past five years.”

Still, some local employers have begun to see evidence that job seekers are becoming more confident and less reluctant to take a shot at a better job, even at the risk of alienating their current employers.

Dave Dysinger, chairman and chief executive of Dysinger Inc. — a precision tool and die maker that has been hiring steadily as business has picked up in the wake of the recession — said most of the new applicants he's seen in recent months already have jobs but are looking for better pay, working conditions and potential for career advancement.

“I think there is more opportunity right now, and people are feeling they can move around a little bit in the work space from company to company,” Dysinger said. “I think some of these candidates are coming here because they think there is an opportunity to learn and grow their abilities so they are more marketable and can earn a higher income.”

Such career advancement can lead to higher wages and increased consumer spending, which propels economic growth and the demand for workers.

It also creates more opportunities for displaced workers who were hammered by the recession and have been forced to take jobs that pay less than they were making before the recession or poorly match their job skills, said Tom Maher of Manpower of Dayton Inc., which predicts employers in local area will be hiring at a faster pace over the next three months.

“When someone takes a different job, a move-up, it creates an opening for someone else to do the same,” Maher said. “As the employment picture continues to improve, we will see the movement from one job to a more attractive job accelerate.”

Englewood resident Andrew Klosky, 31, a former teacher and freelance designer and editor, is counting on a thawing job market to help him move up from his current job delivering pizzas for Donatos Pizza in Harrison Twp.

“For the past year and a half, I've searched desperately for a job, both within teaching and outside of it,” Klosky said. “School districts have no desire to hire someone with seven years of teaching experience and a masters' degree, when they can hire someone cheaper fresh out of college. I've had countless interviews at schools and businesses, with no one hiring me.

“Right now, we're barely making ends meet,” he said. “My money from pizza delivery, coupled with a monthly freelance gig barely covers our expenses.”

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