It’s hard to escape one fact from the daily news: that the U.S. economy is suffering from a huge skills mismatch between the roughly 10 million jobs that are unfilled and begging for the right people and the 7.5 million or so individuals still looking for a job. The mismatch is driven largely by the unprecedented shifts in consumers’ spending patterns since the COVID pandemic began in earnest in early 2020 – away from restaurants, bars and in-person shopping to buying online. Former restaurant and retail workers don’t want to work in warehouses, even if they can make more money, for any number of reasons. Many health care workers are burnt out and have left the field, with not enough replacements in the pipelines ready to take their place.
The fear of catching the virus has kept many workers from rushing back to their jobs if they can’t work from home. The pandemic has induced many workers to rethink their work-life balance, and if they are older, to retire early, and if younger to work less, or if married, for one spouse not to work at all. Some have quit jobs that have required vaccinations. All told, the national quit rate is close to 3 percent per month, its highest level of the past 20 years. https://fred.stlouisfed.org/series/JTSQUR. Many are calling all this the “Great Resignation.”
I am not writing here to celebrate quitting over the refusal to take the vaccine. It’s a sad commentary on our times that false information about the safety and effectiveness of the COVID vaccines has contributed to so much vaccine hesitancy, even by a basketball star as good and famous as Kyrie Irving.
My focus here instead is on the importance of “matching” in our lives and the benefits of quitting for the right reasons, both for individuals and our society.
Of course, saying anything positive about quitting runs against the grain of much conventional wisdom that heaps scorn on those who quit. Too often, we equate quitting with weakness, certainly when it comes to our health. Who can forget the legendary ESPY speech of Coach Jim Valvano in 1993 (it’s hard to believe it was that long ago, feels like yesterday), who when dying of brain cancer, he urged his audience (now much larger thanks to video archives like those maintained on sites like You Tube), “Never give up...never ever give up..”? Valvano’s exhortation eerily echoed Winston Churchill’s exhortation to the British public during World War II to “...never give in, never give in, never, never, never - in nothing, great or small, large or petty.”
But some people may forget or not realize what Churchill said next: “never give in except to convictions of honor and good sense." For readers who remember I riffed off David Epstein, author of Range, in an earlier post, I apologize for doing it again, because he highlights that huge qualifier from Churchill’s famous line. Epstein has another story that also resonates with my seeing so many stories about the high national quit rate, and so I briefly summarize it now.
In 2010, a think tank arm of the U.S. Army sounded a little-known alarm in a study showing the high quit rates of West Point graduates after their initial five-year post-graduation service was up. Since the mid-1990s, the study found, about half of West Pointers left the Army, which not only worried the Army because it may have been losing some of its best future leaders, but also strictly from an economic perspective the quit rates were damning. The U.S. had paid the tuition, room and board and training costs of roughly $500,000 per cadet and yet was losing half of them five years out. 75% of them ten years out.
In contrast, the Army had much higher retention rates for officers who had completed Office Candidate School (OCS) after enlisting in the army after high school or completing a non-military college, followed by ROTC trainees who had come through a non-military college.
What was going on? The authors of the study, themselves current or former West Pointers, pinned down the reason. People change, what they want out of life and what they see themselves doing change, especially at young ages. Those coming into the Army at age 22, after college, had firmer ideas of their plans than kids of 18 who had signed up for West Point, only to realize later that there were opportunities outside the Army they didn’t want to miss.
Moreover, the Army wasn’t doing anything to help, not being flexible in offering the West Pointers after their post-graduation hitch the types of assignments they really wanted (infantry, intelligence, engineering and so forth), or in places they want to serve. In other words, the Army was failing at matching jobs to people, making it rational for too many of its West Pointers to quit about a decade after they were plebes.
To its credit, the Army recognized the problem, and at least up until the time the book was written, was working on changing. In 2016 then Secretary of Defense Ash Carter told the cadets he was revamping the career assignment system to solve the problem. (Epstein doesn’t report the results of the change, or how permanent it was, but the story illustrates the matching problem so well, I couldn’t resist retelling it). My friend and former Kauffman Foundation colleague who also is a graduate of the Air Force Academy wrote a terrific book, Bleeding Talent, in 2013 anticipating all this.
Now think about the matching problem (and quitting) in your own work and personal lives, given the fact that we all change as we gain new life experiences, things happen to us, and so forth. Isn’t life – both personally and professionally – all about finding the right match, and then trying to make it work?
Clearly, finding the right match – the right partner -- is a key to success in our personal lives. If it shows nothing else, the story about the dangers of premature commitment in the Army shows the wisdom of most parents’ advice not to get married too early. Not before each person has more life experience. Though there are exceptions: some first or early loves are the right matches.
Searching for the right match in our careers is more of a process, since it is expected that one will move from job to job, perhaps career to career, in one’s work life. This is especially true in today’s economy, where tumultuous changes going well beyond automation – the recent pandemic, perhaps future pandemics, the disruptive impacts of climate change – will continue to disrupt the economy, the labor market, and our society.
In such a world, people will have to quit, not just once but many times, to get ahead, let ahead to stay afloat. It helps when the economy is strong, labor markets are tight, and other similar or even better jobs are available. Then staying at the same job out of inertia, when there are better opportunities, can clearly be the wrong thing to do.
That is why the quit rate – more so than the unemployment rate – is the best measure for the health of the overall economy. High quit rates mean that companies must work harder to please their current workers. High quit rates are also a signal of what economists call “dynamism,” the creation of more new firms offering new and better products and services that are able to find the workers they need with skills that fit their businesses because workers elsewhere feel secure enough to quit. Dynamic economies also display faster growth in productivity -- typically measured by what we produce for a given amount of labor – which is the key to rising living standards over the long run.
About the only silver lining in the pandemic – which has been the deadliest experience for our nation in my lifetime (71) – is that, even with the ups and downs, our economy has been much more dynamic since the virus. Labor productivity has soared. https://data.bls.gov/timeseries/PRS85006092. For all the complaining by those who have been working remotely, those workers seem to be getting a lot more work done. For those front-line workers who have been showing up, the worker shortage has been driving up their wages, while firms are making better use of technology or changing their business models. The currently large mismatch between the skills that employers want and those that available employees have, gradually will get resolved, through some combination of labor-saving innovations that lead to more rapid productivity growth, more wage increases, and the movements of retrained workers (though mostly through own expense) not only to new jobs, but to the founding of new firms.
What our economy is experiencing in what we hope will be the tail end of the pandemic reminds me of two ground-breaking books. One is by the late Mancur Olson, one of the great economists of the late 20th century, who wrote this 1984 classic The Rise and Fall of Nations:. My good friend and great journalist and public intellectual, Jonathan Rauch, built on Olson’s book a decade later with his classic Demosclerosis.
Both books show how over time societies can become sclerotic, especially as interest groups proliferate, each protecting its own turf, effectively gumming up the workings of the economy, making it less dynamic. Disruptive technologies can shake things up, reshuffling the deck, for both firms and workers, and getting economies out of their ruts. The Internet has done this, for example, though with some big downsides.
The biggest disruptors, historically, have been wars, which literally level the playing field and force societies and people to start over. Cobwebs are obliterated. So are old ways of doing things. It is no accident that the U.S. and global economies boomed after World Wars I and II. But it should go without saying that no one wants wars – or pandemics – to ensure that economies are dynamic. The human costs are unacceptable.
That is why investing in basic science, which ultimately with a lag, leads to growth-promoting innovation, however painful in the short run, is only our salvation in the long run. Our country, and specifically our federal government, is not doing enough of it. We should be doing more.
We are going to solve or meet the climate change challenge only through innovation. The world, or much of it, has been saved from many more deaths and illnesses during the pandemic by the remarkable innovations that led to the COVID vaccines (despite the hesitancy and the diffusion of misinformation that have impeded their effectiveness). Even the downsides of the Internet and Big Tech will be rectified ultimately not by laws, but new technologies and the creation of new firms, as hard as that may be to imagine now.
We are not helpless in the face of change. By continuing to learn, to be open to new challenges, and to taking some prudent risks, we can make our own matches. Quitting one thing and doing another is not weakness, but a sign of strength, knowing that we have the courage to take the risks that lead to personal and professional growth.
Likewise, if you’re a parent worried about your children finding the right career or passion, chill. They’re just looking for the right job and career match in a tumultuous world. Try to keep in mind two examples from Epstein’s book. Vincent Van Gogh didn’t discover his talent for or interest in the kind of painting he made famous until his mid-30s. Michelangelo often sculpted by experimenting while chipping away, rather than having a clear goal in mind before starting. He was just searching for his best match.
We all are. We’re lucky if we’re already there. If not, keep experimenting, quitting one thing, if after trying your best you’re not satisfied, and don’t be afraid to start another. Remember, a life well lived is one that is well matched.