Restaurant workers are quitting like crazy
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Thursday, July 8, 2021
Quits have never been a bigger part of restaurant worker churn
By now, Morning Brief readers have likely become familiar with everyone's favorite hipster economic data report: JOLTS.
Short for the Bureau of Labor Statistics' Job Openings and Labor Turnover Survey (JOLTS), the report has been closely watched by investors for years since this data was flagged back in 2013. It was one of former Fed Chair Janet Yellen's preferred sources of additional labor market data.
Wednesday's data showed a record number of jobs were open in the U.S. in May, though the total was just 16,000 above April (so let's call it unchanged for the last two months). Since the start of the year, there have been huge moves higher in openings as employers looked to staff up into a broad economic re-opening.
And so as openings have flattened out, Wednesday's report also suggests that overall churn within the labor market has moderated. The quits rate — which measures the number of quits relative to the total labor force — stood at 2.5% in May, down from 2.8% in April. As Yahoo Finance's Denitsa Tsekova noted Wednesday, quits are seen as a sign of worker confidence. The overall rate of separations came down to 3.7% in May, the lowest since January.
But the food services industry, one of the most upended sectors during the pandemic, has remained in a state of flux. Quits as a percent of total separations in the accommodation and food services industry hit a record high of 80% in May. This number is ~5 percentage points higher than the ratio that prevailed for much of the pre-pandemic economy, a time when economists said we were at "full employment."
Overall employment remains about 7 million jobs below February 2020 levels, but if you're in the food industry things have never been more competitive.
Earlier this week, we explored the role higher wages in this industry might play in resetting both worker and employer expectations.
Initiatives from national chains to entice new hires, or retain existing talent, show how acute the pressure remains on restaurants to keep enough staff on hand to operate at something resembling full capacity. Staffing levels, however, are still holding many outposts back and employers are quick to complain, though raising wages seems to do the trick.
The big takeaway from this industry-level data is that competition has basically never been stiffer for staffing up a restaurant. And the longer these pressures remain, the more likely any changes made to navigate this turbulent period are to stick around.
By Myles Udland, reporter and anchor for Yahoo Finance Live. Follow him at @MylesUdland
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