The number of Americans quitting their jobs is the highest on record as workers take advantage of strong employer demand to pursue better opportunities.
Yet despite that leverage, an overwhelming majority of Americans say they are worried about inflation — and most say their pay is not keeping up with rising prices.
That contrast — evident in survey results released Tuesday — underscores the strange, contradictory moment facing the US economy after two years of pandemic-induced disruptions.
For some workers, particularly at the lower end of the pay scale, the intense competition for labor has created a rare opportunity to demand better pay and working conditions. But for those who cannot change jobs as easily or who are in sectors where demand is not as strong, rising prices are yet another challenge in a period that has been full of them.
Those crosscurrents are at least partly a result of the remarkable strength of the economic recovery. After collapsing in the first weeks of the pandemic, consumer spending quickly rebounded and eventually reached record levels, fueled by hundreds of billions of dollars in federal aid. Businesses, whipsawed by the sudden reversals, struggled to keep up with demand, leading to supply chain snarls, labor shortages, and rising prices.
The stubborn nature of the pandemic itself contributed to the problems, upending spending patterns and keeping workers on the sidelines.
There are signs that the worst of the problems were beginning to ease late last year. The number of job openings posted by employers fell in November, the Labor Department said Tuesday, though it remained high by historical standards. Hiring picked up, too. Earlier data showed that more people returned to the labor force in November, and various measures of supply chain pressures have begun to ease.
But that was before the explosion in coronavirus cases linked to the Omicron variant, which has forced airlines to cancel flights, businesses to delay return-to-office plans, and school districts to return temporarily to remote learning. Forecasters say the latest COVID-19 wave is all but certain to prolong the economic uncertainty, though it is too soon to say how it will affect inflation, spending, or the job market.
Americans are pessimistic about the economy. Only 21 percent of adults said their finances were better off than a year ago, according to a survey released Tuesday — down from 26 percent when the question was asked a year earlier, even though, by most measures, the economy had improved substantially during that period. The survey of 5,365 adults was conducted last month for The New York Times by Momentive, the online research firm formerly known as SurveyMonkey.
Overall consumer confidence is at the lowest level in the nearly five years Momentive has been conducting its survey. Republicans have been particularly pessimistic about the economy since President Biden took office a year ago, but in recent months, Democrats too have become more dour. Other surveys have found similar results.
Inflation appears to be a big reason for people’s dark outlook. Nearly 9 in 10 Americans say they are at least “somewhat concerned” about inflation, and 6 in 10 are “very concerned,” the survey found. Worries about inflation cross generational, racial, and even partisan lines: 95 percent of Republicans, 88 percent of independents, and 82 percent of Democrats say they are concerned.
“Pretty much the only group of people who say they’re better off now than they were a year ago are people who’ve gotten a pay raise that matches or beats inflation,” said Laura Wronski, a research scientist at Momentive.
There are not many of them. Only 17 percent of workers say they have received raises that kept up with inflation over the past year. Most of the rest say either that they have received raises that lagged behind price increases or that they have received no raise at all; 8 percent of respondents said they had taken a pay cut.
Government data likewise shows that, in the aggregate, prices have risen faster than pay in recent months. The Consumer Price Index rose 6.8 percent in November, a nearly four-decade high; average hourly earnings rose 4.8 percent in November; and other measures likewise show pay gains lagging behind price increases.
Yet some workers are seeing much faster wage growth. Hourly earnings for leisure and hospitality workers were up 12.3 percent in November, much faster than inflation. Workers in other low-wage service sectors are also seeing strong gains.
Many of those workers are getting raises by being willing to hunt for better opportunities. Data from the Federal Reserve Bank of Atlanta shows that job-switchers are getting significantly faster pay increases than people who stay in their jobs.
More than 4.5 million people voluntarily left their jobs in November, the Labor Department said Tuesday. That was up from 4.2 million in October and was the most in the two decades that the government has been keeping track. The rate of quitting has been especially high in hospitality and other low-wage sectors, where strong demand has given workers the leverage to seek out better pay.