Today's chart of the day is presented with little comment. One of the most disturbing and revealing dynamics in the latest Bureau of Labor Statistics (BLS) Job Opening Labor Turnover Survey (JOLT) report is that the ratio of people who are quitting jobs as compared to those being laid off. This ratio is rising sharply.
From the report:
"Quits are generally voluntary separations initiated by employees. Quits are procyclical, rising with an improving economy and falling with a faltering economy. Layoffs and discharges are generally involuntary separations initiated by an employer and are countercyclical, moving in the opposite direction of quits. The ratio of the number of quits to the number of layoffs and discharges provides insight into churn in the labor market over the business cycle.
In August 2006, before the recession, the ratio was highest at 1.8 with nearly two people quitting their job for each person laid off or discharged.
From November 2008 through March 2010, layoffs and discharges outnumbered quits and the ratio fell below 1.0. The ratio was lowest at 0.7 in April 2009 toward the end of the recession, with less than one person quitting for each person laid off or discharged.
The quits per layoff and discharge ratio was 1.7 in November."
This is a function of both the culture and the structural shifts in the employment market. The sharp spike in quits is suggestive that the current employment market may be reaching full capacity, which with more than 92 million sitting outside the workforce and 20% of households on food stamps is suggestive of a much larger problem.
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