What caught my eye this week.
According to the BBC [1], the Great Resignation in the US is ‘over’:
Since the Covid-19 pandemic took hold in 2020, millions of workers have left their jobs.
In the US, 47 million people quit in 2021, and 50 million more in 2022, according to data from the US Bureau of Labor Statistics.
The continued exodus was so significant that in May 2021, Anthony Klotz, then-associate professor of management at Texas A&M University, coined the term ‘Great Resignation’ to put a name to the trend.
The Great Resignation was unprecedented – and particularly striking against a backdrop of incredible global uncertainty. Now, however, economists say it’s over.
Something similar [2] happened in the UK to a lesser extent too. Employment has remained surprisingly resilient. And in a strong jobs market it’s obviously easier to switch jobs.
I’d also suggest inflation is an incentive and a driver. A company constitutionally equipped to give maximum pay rises of 5%, say, can quickly find most of its workforce disgruntled and playing job Frogger when inflation is nudging 10% and salaries at rivals have been re-calibrated accordingly.
Scrabble
What has apparently been distinctive with the UK’s post-Covid workforce – or otherwise – though is the rise in people too sick to work [3].
In November the ONS [4] said 2.5m people cited long-term sickness as the reason for their economic inactivity. Before Covid that number was two million. Both the half-a-million increase and the total look pretty chunky, even in the context of the nearly nine million [5] economically inactive overall.
Nobody seems quite sure what’s going on. Long Covid was blamed a lot at first, but a House of Lords committee recently concluded [6] that early retirement among older workers was a bigger driver.
Either way, it’s interesting how the narrative has developed in the US versus the UK.
While older workers certainly left the workforce at an increased pace in the US [7] too, the bigger spin was “Covid made me reevaluate my career and switch up” rather than the “Covid made me realise life is too short for more work so I quit” pieces that I’ve read many times in UK coverage.
A political take could be even our stretched welfare state better supports quitters than North America’s. There, poor, unhappy, and/or underpaid workers maybe have to job hop rather than drop out. Many of those who do want to quit can’t afford to – not without a generous state at their back.
A seductive theory, but there are plenty of ways to push back. Not least that many over-50s in the UK who did quit work early due to Covid now seem to be much poorer [8] as a result.
Game of Life
I’ve a hunch that a deep dive into the statistics might reveal the bigger difference lies in the kinds of stories our two countries prefer to tell to and about ourselves.
Interestingly, some pundits believe US workers have stopped resigning because jobs have actually got better, thanks to a combination of working from home flexibility and the one-time job switches.
From the BBC article again:
Job satisfaction is now higher than it’s been in nearly four decades, according to survey data from the Conference Board, a non-profit think tank that has tracked job satisfaction since 1987.
In a late 2022 survey of nearly 2,000 US workers, more than 60% reported being content with their jobs, and some of the most satisfied are those who quit one job for a better one during the pandemic.
That would be an awfully happy outcome from a pretty terrible period. And a bit of a shame that the reluctant quitters amongst those over-50-year-olds in the UK couldn’t find a happier last hurrah. One that left them better able to retire eventually in more comfort.
But what do you reckon? Did you quit work outside of your goals or expectations over the past few years – or know others closely who did? Please share your thoughts in the comments below!
Have a great weekend.
From Monevator
Investment portfolio examples – Monevator [9]
From the archive-ator #1: How to spot a bear market bottom – Monevator [10]
From the archive-ator #2: Money is power – Monevator [11]
News
Note: Some links are Google search results – in PC/desktop view click through to read the article. Try privacy/incognito mode to avoid cookies. Consider subscribing to sites you visit a lot.
Bank of England raises rates to 15-year high of 5.25% – BBC [12]
UK capital gains tax-payers up by a fifth; new receipts record – This Is Money [13]
Fears of food inflation rise as UK harvests hit by cool, wet summer – Guardian [14]
Surge in ‘ISA millionaires’ to more than 4,000 individuals – This Is Money [15]
Fitch downgrades US debt on debt ceiling drama and governance worries – CNN [16]
There’s [arguably] odd logic behind the timing of the Fitch downgrade – Axios [17]
World’s shrinking AAA debt options still include Singapore, Norway – Yahoo Finance [18]
Seven ‘rust bucket’ cars found in shed after 50 years fetch £200,000 – This Is Money [19]
[20]
Why the US economy is so resistant to rate hikes – Axios [21]
Products and services
Shawbrook Bank launches new best buy easy-access and ISA accounts – This Is Money [22]
Lenders cut mortgage rates despite latest BoE rate rise [Search result] – FT [23]
Open a SIPP with Interactive Investor and pay no SIPP fee for six months. Terms apply – Interactive Investor [24]
AJ Bell’s new free pension tracing tool: how does it compare? – Which [25]
Open an account with low-cost platform InvestEngine via our link [26] and get £25 when you invest at least £100. Also, if you set up a savings plan to regularly autoinvest with InvestEngine before 31 August, you’ll be in with a chance of winning £1,000 [27] (T&Cs apply. Capital at risk) – InvestEngine [26]
Are you paying £850 too much for Premier League TV? – Be Clever With Your Cash [28]
From Bip to Zopa: five credit cards you might not have heard of – Which [29]
English country homes for sale, in pictures – Guardian [30]
Comment and opinion
Seven things deemed surplus to a portfolio [Note: I Bonds are US-only] – Morningstar [31]
The yield curve is still inverted – The Irrelevant Investor [32]
Benjamin Graham versus Zero Hedge – A Wealth of Common Sense [33]
Are younger investors too conservative? – Morningstar [34]
Set your future self up for success [Podcast] – Art of Manliness [35]
Why 72% of retirees are happy – The Retirement Manifesto [36]
How much of the market’s return could you get before index funds? [Research] – SSRN [37]
Naughty corner: Active antics
Trading for a living – We’re Gonna Get Those Bastards [38]
Japan in demand (sort of) – Verdad [39]
Don’t bail on Baillie Gifford’s technology trusts – Motley Fool [40]
Fidelity’s suspension of RIT Capital “a good reason to find another platform” – Trustnet [41]
Corporate demographics: birth, death, and wealth creation [PDF] – Morgan Stanley [42]
Kindle book bargains
Factfulness: Ten Reasons We’re Wrong About The World by Hans Rosling – £0.99 on Kindle [43]
How to Avoid a Climate Disaster by Bill Gates – £1.99 on Kindle [44]
Doughnut Economics by Kate Raworth – £0.99 on Kindle [45]
Trillions [Inventing the Index Fund] by Robin Wigglesworth – £0.99 on Kindle [46]
Environmental factors
What if we just stopped fishing? – BBC [47]
The galaxy in the woods – Bio Graphic [48] [h/t Abnormal Returns [49]]
US asset managers are behind on their own climate goals – Institutional Investor [50]
Red Admiral butterfly population soars thanks to UK’s warm winter – Sky [51]
Robot overlord roundup
Who gains from AI? – Dror Poleg [52]
Neeva: the little search engine that couldn’t – The Verge [53]
Off our beat
The Brexit ‘red tape’ illusion has been exposed by the CE Mark climbdown – Guardian [54]
Product and process – Seth Godin [55]
The UK is the work-from-home capital of Europe. Let’s do it right – Guardian [56]
Atomic accountability – Raptitude [57]
How a once-controversial theory of trauma explains how we make sense of our lives – NY Mag [58]
US Republican’s death rate spiked after Covid vaccines arrived, study finds – NPR [59]
Why do so many new songs sound familiar? – Vox [60]
Happiness is bullshit [Few months old] – Everything is Bullshit [61]
And finally…
“We demand rigidly defined areas of doubt and uncertainty!”
– Douglas Adams, The Hitchhiker’s Guide to the Galaxy [62]
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