These Charts Put 'The Great Resignation' in Perspective

Even as we enter 2022, people are still quitting their jobs. From safety concerns as the COVID-19 pandemic lingers on, to more people choosing flexible and remote work options, to workers quitting in search of better jobs with higher pay and more opportunities for upward advancement, the factors behind 'The Great Resignation' are myriad and complex. 

In this segment of Backstage Pass, recorded on Jan. 5, featuring Fool contributors Jason Hall and Rachel Warren, Jason reviews a series of charts looking back at the job market in the years leading up to the pandemic and discusses some of the factors fueling these current trends. 

Jason Hall: Anytime that purple line is above the yellow, that's a concern. Because that means there are more jobs that are open than people that are looking for work. That's a proxy that is used to say, OK, well, this is a great environment to be a job seeker. This is a terrible environment to be an employer.

Because we call it The Great Resignation. I'm pretty sure every employer out there's like, no, this is the worst ever resignation.

Rachel Warren: Right. [laughs]

Hall: It's terrible for them. But what I want to do is I want to show this going back to 2015. You can see generally, most are climbing out of the global financial crisis, the yellow, there were more unemployed people than there were jobs, and that's typically right. You want them to be pretty close, that's the idea you want them to be pretty close.

We see really this was in 2018 that this first became a thing as we were getting close to what they call full employment. I'm going to throw the unemployment rate on here too, so that's the blue one. I hate it when it does that it changes the color, let me reorder them.

Those are back to the right color the blue one is the unemployment rate, so that's 4.2%. Anything below 4% generally is considered full-employment. So 2018, that happened, things flipped. It's gotten significantly worse, obviously, more recently.

I'm going to drop some charts off of this and I'm going to add something. I'm going to add labor force participation rate. Coming out of the global financial crisis, the labor force participation rate was steadily, steadily, steadily increasing because there were a lot of people that left the labor force that eventually came back.

A lot of people did come back to the labor force. Now, but here's the thing, guys. Let's stretch this out 10 years. Hey, look at that. That's above 63%. Let's really stretch it back. Pretty much from the time baby boomers started to dominate the workforce.

Then in the '90s, when Gen Xers started getting jobs, their kids, the late '80s, the early '90s, the Gen Xers started getting jobs. Labor force participation was well above 66%.

What I wanted to show is that really since the mid 2000s, there's actually been a pretty steady decline. Guys, that's the thing that nobody is really talking much about. That's baby boomers retiring. Right now, between now and the end of 2029. We've got another eight years of this. About 10,000 Americans turn 65 every single day. Millennials is the largest cohort by population today.

But not because there were more millennials born than any other cohort. Because boomers died into a smaller cohort, I mean, that's the bottom line.

At the peak, baby boomer population was the largest cohort in American history. The basic math is when you have your largest cohort that is dying and retiring, and the cohorts behind them are smaller and population. That's an issue, and that's where we are right now.

The other thing we're not talking much about is the fact that we've seen far less immigration into the U.S. over the past couple of years, for good reason. Because everything going on with the pandemic, the job opportunities have really only started showing up over the past nine or 10 months really since things have really started to fully open up. Really the past six months is when it's accelerated.

We're just in this weird place right now where we don't have enough people to do all the jobs. It's not just The Great Resignation. Yes, that's a real problem. There's a lot of people that are sick of doing crappy jobs, for menial work for little amount of money with no recognition, and they don't have to do those jobs anymore. There aren't enough people to backfill.

There's always been people that wanted to leave their job because it stunk. Now, people realize that they have the leverage. We just don't have enough people. I don't know what the short answer to that is. 

Warren: Well it isn't. Those are great points from all of you guys. It's not a simple answer. I think that's the thing that's important to note here.