Bad Managers Are Making the Labor Crisis Worse: Allison Schrager

It’s being called the Great Resignation. Quits are at their highest rate in 20 years and no one seems to understand why. One thing is for sure: the labor market has gone weird. People are leaving their jobs without having a new one lined up, pushing up unemployment rates even as wages rise and companies complain they can’t find enough workers. That’s led to lots of speculation that the pandemic has changed people’s priorities — and hence the U.S. labor market — forever.

In the urgency of the moment, it’s easy to overstate the significance of what’s going on; every major recession leaves scars. But some things don’t change, and that includes the most basic requirement for keeping employees happy and on the job: Good management.

Government policymakers can run around trying to fix the situation by mandating higher wages, more benefits, or even by expanding the power of unions. None of that will change the simple fact that bad managers are a handicap no company can afford anymore.

Since the 1980s, the trend has been for Americans to stick with the same job longer. That changed last year. It’s not just that people are quitting more often, which isn’t such a surprise if there are lots of better jobs available. Quits and hires normally move in tandem, or with a small lag, and those job-to job-changes are definitely part of the quit mix now. But what’s rattling the market is the disconnect: quits are up and hiring is down at a time when employers are desperately trying to attract workers.

A big educational divergence in this trend is also causing more problems for some industries than others. Using data from the Current Population Survey, I estimated the share of workers who quit or left the labor force in the last year and who still aren’t working. High school dropouts in this category rose to 2.8% from 2.1% two years ago. More educated workers haven’t become more likely to quit.