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In 2020, COVID caused the most dramatic rise in unemployment the U.S. had ever seen. Employees who were lucky enough to avoid being laid off during the first fe
by jawns 2y ago
In 2020, COVID caused the most dramatic rise in unemployment the U.S. had ever seen. Employees who were lucky enough to avoid being laid off during the first few months of the pandemic largely hunkered down and resolved to stay with their current employer until the dust settled, even if they would otherwise have been looking to change jobs.
This led to a phenomenon in 2021 and 2022 called the Great Resignation, a period where hiring began opening up again. All of those employees who'd been itching for an exit saw an opportunity to make their move.
One of the interesting effects of this higher-than-normal employment migration in a relatively short period of time is tenure synchronization, where a large percentage of employees have been with the company for the same amount of time. Naturally, there will be some variation in when they decide to make their exits, but this synchrony does increase the chance of a mass exodus event once they've passed the year of average tenure.
There are other macroeconomic phenomena that are contributing toward sustained "phase locking" of the amplitude of employment migration. Post-pandemic, we saw an era of high inflation, and that caused many companies to veer back into more cautious territory and question whether they'd over-resourced themselves during the hiring boom. This led to rounds of layoffs in 2022 and 2023. These conditions have also led to downward pressure on wages. Thus, many employees are waiting until the next hiring wave to make their move.
These factors are likely to induce even more phase locking than the tenure synchonization alone, which means that we could see a second or even third "Great Resignation" event occur during the current decade as employees' synchronized tenures lead to voluntary exits that coincide.
- keyle 2y ago> In 2020, COVID caused the most dramatic rise in unemployment the U.S. had ever seen. I'm afraid this isn't accurate, unless your history of the U.S. is 10 years.
- Izkata 2y agoThis goes back to 1948 and they're correct for that time span: https://fred.stlouisfed.org/series/UNRATE https://fred.stlouisfed.org/series/UNRATE The lockdowns forced a lot of people into unemployment for a variety of reasons on top of the normal "it was a recession" ones.
- keyle 2y agoThanks for this, I was referring to the great depression of 1929. in 1933 when the unemployment rate reached 25 percent. ref. Google
- dalyons 2y agoThis is quite the pedantic point though. That was nearly 100 years ago and has almost nothing to do with today
- PeeMcGee 2y agoI actually interpreted the phrasing of "most dramatic rise in unemployment the U.S. had ever seen" exactly to mean "it was even worse than the great depression in some ways". It seems too peculiar of a thing to say otherwise, especially when the great depression is like the main thing anyone would think to compare it to.
- jawns 2y agoYou're referring to highest unemployment rate. My statement, "most dramatic rise in unemployment," means something different. While the Great Depression saw a much higher peak unemployment rate, the rate of change in April 2020 was the fastest one-month increase in US history.
- keyle 2y agoMy bad, thanks for clarifying!
- jawns 2y agoSo few people these days are willing to say what you just said! I applaud you, and (with AI assistance) I've written you an acrostic poem. Holding oneself lightly, not with pride Understanding we all have flaws inside Modest in manner, gentle in speech Inclusive of others, willing to teach Learning from mistakes, growing each day Ignoring the urge to have our own way Thoughtful of others, putting them first Yielding to wisdom, quenching ego's thirst
- underlipton 2y agoAnother view: a lot of people were laid off at the beginning of 2020. To prevent a total meltdown, unemployment assistance was made unusually robust (for the US). With the stimulus, it was not unheard of for people to be getting more in unemployment than they'd ever made actually working. Likewise, PPP loans meant that anyone with even a trivial business and a handful of employees could apply for support. The "Great Resignation" (a clever bit of branding; people were moving to better jobs, not resigning) coincided with that easy money drying up. Businesses had to actually start making money again, as did workers (many of whom re-skilled during the pandemic). Higher-than-normal employment migration might have just been people coming out of unemployment, gig work, and whatever jobs they took just to ride out the crisis. Also, high inflation coincided with the increased numbers at many companies. The layoffs came after inflation started to cool (probably an important contributor to stagnating wage growth), and probably were related to the Fed continuing to raise interest rates and putting off a pivot to dropping them until... Well, they still haven't done a cut, yet.
- eltoxo 2y agoIt is also the normal state of the economy to not job jump because it is normally hard to get a job. The far from equilibrium state was software jobs with 0% interest rates the last decade. Then you have people who entered the workforce during this time believing this is how things have always been and always will be. Surprise! That was a temporary state we are never going back to in your lifetime. It is like when I was young, every song had to have a guitar solo. To hear a song with no guitar solo was so weird. I assumed things would always be this way. Neither the guitar solo or the 2016 software job market is ever coming back the same way it use to be.