In This Economy, Quitters Are Winning

Kimberly Enoch had a stable job working from home managing grants for a Little Rock, Ark., nonprofit, but she was bored and thought she could do better.

“I knew I could do more,” Ms. Enoch said.

She is part of a bigger trend. Workers are choosing to leave their jobs at the fastest rate since the internet boom 17 years ago and getting rewarded for it with bigger paychecks and/or more satisfying work.

Labor Department data show that 3.4 million Americans quit their jobs in April, near a 2001 peak and twice the 1.7 million who were laid off from jobs in April.

Job-hopping is happening across industries including retail, food service and construction, a sign of broad-based labor-market dynamism.

Workers have been made more confident by a strong economy and historically low unemployment, at 3.8% in May, the lowest since 2000. Ms. Enoch started getting interview opportunities the same day she began sending out applications online.

The trend could stoke broader wage growth and improve worker productivity, which have been sluggish in the past decade. Workers tend to get their biggest wage increases when they move from one job to another. Job-switchers saw roughly 30% larger annual pay increases in May than those who stayed put over the past 12 months, according to the Federal Reserve Bank of Atlanta.

Almost one in seven of the nation’s 6.1 million jobless Americans in May were voluntarily unemployed, having left a previous position to look for another, the highest share of voluntary unemployment in more than 17 years.

For much of the expansion, skittish workers, stung by their experiences during the recession, chose to stick with their employers. Janet Yellen, the former leader of the Federal Reserve, began following measures of quitting closely, seeing the reluctance of workers to leave their jobs as a sign of slack in labor markets. Now job-hopping is a feature of good economic times.

The recent uptick in quitting goes against a long-running decline in worker mobility. In recent decades, as the population aged and business startups became relatively more rare, employees tended to stick at their jobs longer, said Steven Davis, an economist at the University of Chicago who studies labor-market churn. He and co-author John Haltiwanger presented the findings of diminished economic dynamism to central bankers at the Federal Reserve’s annual Jackson Hole, Wyo., symposium in August 2014.

The problem was exacerbated by the 2007-2009 recession. Fretful workers stayed in roles that weren’t good matches for them, also hurting national productivity. Now that they are looking for better matches, productivity could improve.

In the third quarter of 2009, 2.1% of workers changed jobs, according to Census Bureau data. That climbed to roughly 4% by the first quarter of 2017, matching the highest rate since 2001.

“A husband and wife can easily quit their jobs and both find good opportunities in jobs they want, where they want to live,” Mr. Davis said. He says the recent uptick in quitting suggests the economy is running hotter, though it doesn’t necessarily reverse the long-running trends leading to less churn.

Jeremy Divinity, 27, quit his marketing job in Washington, D.C., in August because he wanted to move back to Los Angeles, his hometown.

“I wasn’t too worried about finding a job out here,” he said. “I knew that something would eventually play out.”

Once in Los Angeles, Mr. Divinity relied on freelance gigs while he took his time looking for the right match. In February, he found it with a boutique agency that creates social-media strategies.

 The resurgence of job-hopping is particularly helpful for younger workers looking for footholds to launch their careers, said Erika McEntarfer, an economist at the Census Bureau. About 6.5% of workers under age 35 changed jobs in the first quarter of last year, versus 3.1% of those ages 35 to 54, according to census data.

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