The number of people leaving the workforce hit a new record in August, according to data released by the Department of Labor.
About 4.3 million workers quit their jobs in August, up from 4 million the month before. The quantity of people quitting is the highest since the United States began keeping records of the statistic about two decades ago. The figure is equivalent to nearly 3% of the workforce.
Additionally, there were fewer job openings than there were in July, with a little over 10.4 million in August, compared to the 11 million previously recorded — the first time the rate has fallen since the start of the year.
The industry most affected by the rising quits rate was accommodation and food services, which notched losses of about 6.8%. The leisure and hospitality industry also saw a decline to the tune of 6.4%, and retail trade retreated by 4.7% in August.
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The quits rate measures the number of people who voluntarily left their jobs and includes people who left their job for another one and people who quit and are confident they will soon find new employment, given the tight labor market.
“The desire for flexibility in either hours worked or ability to work remotely was given a higher priority over pay or compensation, which is a remarkable change caused to some degree by the pandemic,” said Greg McBride, Bankrate’s senior economic analyst.
One factor that could be pushing up the quits rate is the delta variant of COVID-19, which was surging to new highs in August but has been in decline since a peak in mid-September. While the coronavirus has certainly affected the labor market, a variety of other factors are also at play, including demand.
“The tepid employment growth we have seen in recent months has been at least partially the result of a decline in hiring appetite. The question is whether this is a temporary speed bump due to a surge in COVID cases or if demand will continue to slacken in the months ahead,” said Nick Bunker, Indeed Hiring Lab’s director of research.
Some economists and lawmakers have pointed their fingers at government intervention as causing slowdowns in hiring and people leaving the workforce. Many people across the country were still receiving supercharged federal unemployment benefits in August before the program sunset on Labor Day.
The September jobs report was surprising to some who predicted a big surge in new jobs following the program’s cessation. Instead, the economy fell short of expectations and added just 194,000 new jobs in September, well below the 473,000 jobs that forecasters had anticipated.
Still, some Republicans are pointing to other federal benefits, such as the expanded child tax credit, which is now being disbursed as a monthly payment from the government. The change increased the amount of funds parents are provided and eliminated work requirements.
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Rep. Carlos Gimenez told the Washington Examiner during a Tuesday interview that he thinks that Democrats and the Biden administration are largely to blame for the country’s employment woes. He said that business owners have been telling him that people are forgoing work to collect government benefits.
“I think a lot of it has to do with the policies implemented by this administration,” the Florida Republican said. The congressman added that businesses are having “extreme difficulty” finding qualified workers.
