The United States of America is still recovering from the pandemic but is struck by the increase in the job quitting rate. September marked 4.4 million Americans that make up to 3% of all the people employed in the nation quitting their jobs. Adding to facts, the US Department of Labor stated that the number was 164,000 more than what was calculated in August which is the second-highest month of the job quitting rate ever recorded. One would not be called wrong for blaming the pandemic as the primary reason for the upset in the Labor market. However, it is fair to say that the increasing burden of childcare and early retirement of old people also added to the huge number of jobs quitting. On the brighter side, it is taken as a sign of relief for the unemployed people who are in desperate need of a job. Businesses, firms, and job employers are now keen to offer a higher wage which was reflected in a 4.9% increase of hourly average earnings of labor in October and additional generous job bonuses as the US labor market is 4.2 million short of the required labor. Businesses however have a mixed opinion about the chaotic situation. Some businesses claim that now they can hire people with more skills that fit perfectly with the job’s requirements and also get rid of inefficient labor. The opposition argues that the shortage of labor is slowing down business activity and increasing the cost of production. The cost is then an additional burden on the consumer which is one of the main reasons for the high inflation rate. The US consumer prices have jumped to 6.2% in October from the same month of last year which is a record-breaking fastest increase in the last 30 years. After reading the facts, would it be fair to blame the people who are quitting their jobs for being the center of inflation? Or we should just blame the pandemic for the economic crisis?
Sources
https://www.aljazeera.com/economy/2021/11/12/americans-keep-quitting-thier-jobs-in-record-numbers
3 comments:
There are too many factors included in why there is a rise in inflation. I would suspect that the biggest contributor is not higher wages and labor supply shortage, but instead the supply chain shortages. Products are so expensive given the shortages. However, as we have discussed in class, this is how the market works. When supply is extremely low, price will increase. This will allow for efficient resource allocation as those who can afford/need the high prices will buy the products and those who cannot will not buy it. This will allow for supply to rise and eventually return to equilibrium.
No individual or party should be blamed for inevitable economic disruptions from time to time in a capitalist society. We are currently in or heading towards the downturn of the business cycle, but rest assured that the economy is going to recover like it always does. As for the argument of efficiency of people quitting their jobs, I argue that businesses can not get rid of inefficient workers from this situation because people who quit their jobs are most likely going to be hardworking and efficient workers who deserve to get paid more. Inefficient workers are likely to choose to keep slacking and still get paid. Therefore, I stand by the opinion that the shortage of labor is slowing down businesses activity and increasing the cost of production.
The job market has definitely taken a hit recently. This is subject to many factors in our economy. We have seen a lack of willingness to find jobs along with supply chain shortages. This is not a good combination for any economy in the world.
Post a Comment