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News from EPI Low churn underscores weakness of the labor market

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The May Job Openings and Labor Turnover Survey (JOLTS), released this morning by the Bureau of Labor Statistics, shows job openings were essentially unchanged in May, increasing by 28,000 to 3.8 million. In fact, job openings have improved very little over the last year and remain depressed. By comparison, in 2006/2007, there were 4.5 million job openings each month, so May’s level of 3.8 million is more than 14 percent below its prerecession level. In May, the number of job seekers, which increased by 101,000 from April, stood at 11.8 million (unemployment data are from the Current Population Survey and can be found here). The “job-seekers ratio”—the ratio of unemployed workers to job openings— was unchanged in May at 3.1-to-1.

In her analysis, EPI economist Heidi Shierholz notes that another indication that we are far from full labor market health is the low rate of churn.  The reason there is low churn, or turnover, in today’s labor market is because jobs are scarce and employed workers are much less likely to quit the job they have. In 2006/2007, nearly 3 million workers voluntarily quit their job each month, dropping to a low of 1.6 million in September 2009. It has since increased somewhat, but is still extremely low. In May, it was 2.2 million, basically unchanged from April (+18,000). “Because leaving a job for a better opportunity can be an important way workers see advancement, this persistent depressed rate of voluntary quits represents millions of lost opportunities,” said Shierholz.