Your Money: The great resignation: myth or reality?

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One of the fastest trending economic stories this year has been the “Great Resignation,” a phenomenon that’s tied to the record number of people who quit their jobs in April 2021. In July, that record was broken, as it was again in August and September. Media reports have pounced on these job “quits” as evidence that American workers are removing themselves from the workforce at an unprecedented rate.

Bruce Helmer and Peg Webb

But for anyone thinking of throwing in the towel on their job, or for business owners coping with the talent shortage, the reality is more complicated.


Most of the so-called “quits” is not about people giving up their jobs, but job-hopping to better, higher-paying positions. This is certainly true of the hotel and restaurant sector, which, along with health care and technology, has seen more quits than any other part of the economy. But the flip side is interesting: The accommodation and food service sector added 2 million employees in 2021, more than any other sector, according to a recent article in The Atlantic.

We are also seeing the highest level of job openings on record, across most sectors, that are largely going unfilled. Consumers, who put off buying things during the pandemic, are eager to spend. This, along with supply-chain disruptions in manufacturing and transportation, is creating huge demand (and higher prices for almost everything). With so many opportunities, people are willing to take a chance on leaving their current job, especially with employers who are reluctant to offer remote work, or if those jobs are inherently low-wage, high-turnover positions.


What’s different about the Great Resignation from the Great Recession of 2008-’09 is that for a lot of workers, their overall financial situation is much better today. As Harvard labor economist Lawrence Katz points out, an expanded social safety net and (now-tapering) stimulus payments are in place to support unemployed people who are reluctant to return to the office or worksite. Well-off people continue to do well in the stock market and have increased their household savings. But even workers at lower-income and wealth-distribution levels have come through this period in relatively better shape than prior recessions. Some are taking the opportunity to focus on caregiving, to invest in job retraining or opening new businesses — or simply waiting and looking for something better.

What’s less clear is whether the sidelining of so many workers is temporary or a permanent sea change. Especially puzzling, as Katz points out, is how slowly the large number of unemployed people are moving back into the job market, given how many openings there are, even as stimulus payments are drying up and the pressure builds to restore their income.

Clearly, employers across many industries will need to be more competitive in terms of wages and benefits to attract and retain workers, at least in the near term. They also will need to reset their thinking about the traditional employer-employee relationship when it comes to flexible work arrangements, retirement plan design, job skills retraining and so on. Employers who are empathetic to the challenges that their employees feel from hybrid work relationships, financial stress, caregiving responsibilities, and who can adapt their benefits models to be more supportive of their employees’ overall wellness, may be better positioned to compete for talent.


There are three reasons workers leave the workforce: They can voluntarily quit, they can be laid off or fired, or they can announce their retirement. In fact, announced retirements among adults aged 55 and older have increased during the pandemic and are responsible for some labor-market exits.

According to Pew Research Center, half (50.3%) of older adults are out of the labor force due to retirement, as of the third quarter of 2021, a 2 percentage point increase since the third quarter of 2019. In contrast to the Great Recession, when plummeting asset values (including home prices) induced many older workers to keep working and postpone retirement, the latest numbers suggest that over-55 workers who have completed at least a bachelor’s degree are retiring at a rate three times that of workers who have a high school diploma or less.


Business owners and employees both continue to face a broad array of work-related challenges. As the relationship between bosses and worker bees evolves, both will need to close the understanding gap as to what matters most. It’s possible that the reluctance for some people to remain in or return to the workforce reflects a permanent sea change in people’s values. We wouldn’t bet on it, however. American culture has always been industrious and geared to creating value. What we think is happening is more of a re-alignment of what matters most to people than a great resignation.

Moreover, as tempting as it may be to jump ship from your current job, there are many complex questions that you need to address before your retire. As we wrote in this column in September and October, there are just as many great reasons to retire as there are terrible reasons. And the best reasons have nothing to do with having more free time or less of a commute.

Instead, the desire to retire should be about freeing up time to do the things you are passionate about, supported by a resilient, well-funded portfolio that can handle your expense needs, expected tax burden and legacy planning over your lifetime. Deciding to leave a job for immediate gratification, instead of objectively thinking through the emotional and financial aspects that come with life after working, may not be in your best interest.

Finally, whether you are a business owner or pre-retiree, an experienced financial adviser who specializes in both employee benefits and wealth management can help you assess how and when might be the best time to shift gears on your retirement or benefits plan.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. 

Bruce Helmer and Peg Webb are financial advisers at Wealth Enhancement Group and co-hosts of “Your Money” on WCCO 830AM on Sunday mornings. Email Bruce and Peg at Securities offered through LPL Financial, member FINRA/SIPC. Advisory services offered through Wealth Enhancement Advisory Services, LLC, a registered investment advisor. Wealth Enhancement Group and Wealth Enhancement Advisory Services are separate entities from LPL Financial.