Quittings, Firings and Vaccine Mandates

Which sectors and states are being most affected by the Great American Labour Reshuffle?

There is plenty of turmoil in the US labour market right now. One hot topic is the impact of vaccine mandates. Do these mandates result in more people losing their jobs?

One way to look at this is by looking at state-by-state data on people quitting their jobs as a percentage of total ‘seperations’ — seperations meaning that an employee either quit or was fired. We only have first quarter data for the US — the vaccine mandates were not in full force at the time — but it can at least give us a hint.

I have highlighted states that either have vaccine mandates (green) or have bans on requiring vaccine mandates (red). Remember, the higher the number here, the more people quit than were fired. Inversely, a lower number means more firings relative to total ‘seperations’.

The data speaks for itself. If you are in a state with a vaccine mandate you are far more likely to end up leaving your job by being fired. If you are in a state that bans vaccine mandates, you are far more likely to quit than be fired.

It will be interesting to revisit this data when we have data for the rest of the year. It will be in the second half of 2021 that the vaccine mandates will really bite.

In addition to possible policy-induced firings, a record number of people are quitting their jobs in the US right now. The number of people quitting their jobs has risen fare higher than trend and it is starting to look less and less like a simple post-lockdown correction.

Who is quitting? One way to look at it is to look at weighted growth rates. This measure tells us which industries are driving the recent spike.

Here we see that the main culprits are: accomodation and food services; retail trade; professional and business services; manufacturing; and healthcare and social assistance.

This chart is useful in telling us which sectors are driving the surge. But they do not tell us much about how people quitting their jobs is impacting each industry because smaller industries will not impact the overall level of people quitting even if they have very high rates relative to their size.

An alternative measure we can use to see which industries are being most impacted by the large numbers of people quitting their jobs is the number of people quitting in 2021 as a percent of average people quitting in that industry since 2011. Any reading over 100% indicates that the sector is experiencing a larger number of people quitting relative to history.

Manufacturing shows up again as a highly problematic sector. This could explain some of the bottlenecks and shortages we are seeing for manufactured goods.

But healthcare and transport show up too. Again, this gels with the news reports that tell us of hospitals unable to meet the needs of patients due to being short staffed and trucker shortages leading to supply chain issues.