Fewer Californians quit their job, but workers are still the boss

Resignations are still 42% above the pre-pandemic 2000-2019 monthly average.

Has the California worker lost the nerve to quit and ceded control of the workplace back to the boss?

Across California, 376,000 workers left their job voluntarily in October. That’s unchanged from September and 25% below the record-shattering 499,000 quits of February 2022. This was the fewest number of workers telling the boss “I’m done” in 19 months.

The ups and downs of quitting are carefully eyeballed as an indicator of worker confidence in the employment market. Folks usually don’t leave a job without good odds of securing another paycheck. So the fact that California quits declined – U.S. resignations are 11% off their peak, too – might feel like an economic warning signal.

But my trusty spreadsheet’s analysis of October’s federal employment stats tracking California quits shows the resignation slowdown doesn’t mean the worker is giving up much of their workplace muscle.

Yes, quitting a job – the workplace rage in the pandemic era – isn’t as popular as it once was.

October’s quits equaled 2.1% of all California workers. That’s the seventh-lowest share among the states and down from 2.4% a year earlier. Nationally, 2.6% of workers quit in October, off from 2.8% 12 months earlier. So less quitting isn’t just a Golden State thing.

By the way, Alaska workers were the most likely to quit – 4.7% of them voluntarily left their jobs in October. Then came Wyoming at 3.9% and Mississippi at 3.7%. Least likely to quit: Connecticut and New York with a 1.7% quit rate. Next was New Jersey at 1.9%.

Feeling frustrated

Diminished worker loyalties have frustrated bosses, making staffing challenging and escalating payroll costs.

So employers might cheer the news that quitting’s down in California and in many parts of the nation. There’s been plenty of speculation as to why quitting rose – from changing societal views on work to lingering fears of coronavirus to debates over a huge pandemic-era job change: the option to work from home.

Or could fewer quits be a signal that the Federal Reserve’s efforts to cool an overheated economy are weighing on workers’ career decisions?

The reality is more likely a mild cooling of a hot trend. Resignations are still 42% above the pre-pandemic 2000-2019 monthly average.

Or look at it this way: In the first 10 months of 2022, 4.3 million Californians quit. Those resignations equal the full-year average pace of pre-pandemic 2018-19.

Workers know their bosses have few options. Unemployment statewide hit a record-low 3.8% in September 2022.

And they also see bosses being part of the problem because employers were actually incentivizing quitting.

Job switchers nationwide averaged 7.3% raises in October, according to monthly wage indexes from the Atlanta Fed. Those who stayed in their jobs only got a 5.3% pay hike.

This 2-percentage-point gap was nearly triple the 0.7-point average difference between pay hikes received by switchers and stayers found in data dating to 1997.

These scores of workers switching jobs – or bosses fearing their staffs might bolt – helped boost California pay.

Average weekly wages are up 15% in three years vs. 13% gains in 2016-19, 7% in 2013-16, and 4% in 2010-13 – just after the Great Recession.

But paychecks also offer one hint that demand for help is easing: Wages statewide in the 12 months ending in September were up just 2.6%, the smallest raises in six years by this math.

Help wanted

Think back to the pandemic’s opening days when “We’re Closed” signs – not “Help Wanted” – were most commonly seen at local businesses.

Loyalty was lofty as coronavirus lockdowns iced the economy and unemployment nearly tripled to 16%.

In April 2020, the number of Californians who quit their job plunged by 45% in a single month to 182,000. That’s half of October 2022’s quits. It was also the slowest pace of quitting since 2012.

Or consider this longer-term view.

Since 2000, when California’s quits topped 300,000 – as they have every month since December 2020 – unemployment has averaged 5.3%.

But when fewer than 300,000 Californians quit in a month during the past 22 years, joblessness averaged 8.4%.

Bosses, the workers know what they’re doing.

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com