Kudlow: Biden policies disincentives work
‘Kudlow’ discusses the number of Americans quitting their jobs hits its highest record.
So just a couple of quick points: First, there seems to be a big misunderstanding in the media about the record number of Americans leaving their jobs and the so-called "quit rate." I see the term "great resignation" being bandied about in negative ways, sort of like "nobody wants to work."
And while it is true that a number of Biden proposals to provide welfare-related assistance without any workfare requirements, and I always felt that overly generous and overly lengthy unemployment benefits created incentives not to work, the quit rate is quite a different matter.
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It's actually a sign of labor market strength, and it's actually a sign of worker power. Why? Because labor markets are tight, and people know that they can leave today's job and get a better paying job tomorrow in another place.
4.5 million people quit their job in November, according to the JOLTS report, and that comes to a 3% quit rate, which measures the number of quits as a percentage of payrolls.
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Several decades ago, Alan Greenspan popularized the quit rate as a key labor market indicator. When quits are falling people are afraid to leave their job, and it's usually a sign of high unemployment. But when quits are rising, people are much bolder because they know they can get better-paying work elsewhere, and it's a sign of falling unemployment. This is exactly what's happening now.
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Former fed chair and current treasury secretary Janet Yellen also used the quit rate as a labor market indicator.
So all I’m saying is that quits are a healthy sign for workforce opportunities as long as government stays out of the way.
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This article is adapted from Larry Kudlow's opening commentary on Jan. 5, 2022
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