As the economy struggles to get back on track amid the pandemic, businesses are struggling to find employees — and workers are discovering that they have leverage.
Nearly 4.3 million workers voluntarily quit their jobs in August, the Labor Department said Tuesday. That was up from four million in July and is by far the most in the two decades the government has been keeping track.
The explosion of quitting is the latest evidence that the balance of power in the labor market has swung toward workers, at least temporarily. Average hourly earnings have surged in recent months, particularly for the lowest-paid workers, and yet many businesses report they are still having difficulty finding workers.
The abundance of opportunities may be helping to fuel the wave of quitting: The government’s tally includes people who left jobs to take other, perhaps better-paying, positions — or who didn’t have another job lined up but were confident they could find one — as well as those choosing to leave the work force. (The figure does not include retirements, which are counted separately.)
The number of open jobs actually fell somewhat in August, to 10.4 million from a record 11.1 million in July, as the latest wave of the pandemic took a bite out of consumer demand, especially in the service sector. But the slowdown did little to ease the hiring logjam: There were more open jobs than unemployed workers in August. Openings were particularly elevated in the leisure and hospitality sector, where the number of people quitting was also highest. Economists said the spread of the more-contagious Delta variant of the coronavirus could be contributing to workers’ reluctance to return to work.
At the same time, hiring fell in August. That is consistent with data released earlier showing that job growth slowed in late summer. That data, also from the Labor Department but based on different surveys, showed that the Delta-driven slowdown continued in September. So did the hiring difficulties: The labor force shrank in September, as higher wages failed to draw people back to work.
“We know that the Delta variant has likely made it more difficult to unlock labor supply because there are some workers who are concerned about health risks — and then on top of that, many school reopenings were disrupted,” said Daniel Zhao, an economist at the career site Glassdoor. “It’s possible that as the Delta wave recedes, then we will realize some of those benefits of reopened schools and a revitalized economy, but that is going to take some time.”
Rising Rents Stoke Inflation Data, a Concern for Washington
The recovery in the New York area as a whole has been uneven as some families have moved to the city, bidding up prices, while others are struggling to pay, said Jay Martin, executive director of the Community Housing Improvement Program, which represents landlords of mostly rent-stabilized housing.
“You have bidding wars for one unit, and then a renter who can’t pay,” he said. “A tale of two cities is happening within the same building.”
Drew Hamrick, the senior vice president of the Colorado Apartment Association, a landlord group, said the rise in rents is not driven by landlords but by market factors.
“Landlords don’t really set the price, consumers set the price,” he said. “It’s musical chairs.”
Even if there is a pullback in rents next year, today’s suddenly higher housing costs could make for a painful adjustment period. Higher rent costs can reverberate through people’s lives and force tough decisions.
Luke Martinez, a 27-year-old in Greenville, a town in East Texas, is contemplating buying a trailer and setting his family up on an R.V. lot after learning that he is losing the three-bedroom house he has been renting for about $1,000 per month since 2016.
“It’s insane the amount of rent, even in this little Podunk town,” Mr. Martinez said.
He’s looking at paying up to $1,500 per month for a new place, which will be tough. After getting laid off at the start of the pandemic, he had been living partly on savings — padded by an insurance payout after his car was stolen and totaled. He returned to working in automotive repair only this week. His wife had been working the front desk at a hotel until two months ago, but she is now home-schooling their 8-year-old.
If they end up renting at the higher price, they will most likely afford it by forgoing a new car.
“It’s pretty much just scraping by,” he said of his lifestyle.
John Deere Workers Strike After Failed Contract Talks
Some 10,000 unionized workers at the agriculture equipment maker Deere & Company went on strike early Thursday after overwhelmingly rejecting a contract proposal worked out with the company by negotiators for the United Automobile Workers union.
“Our members at John Deere strike for the ability to earn a decent living, retire with dignity and establish fair work rules,” Chuck Browning, the director of the union’s agricultural department, said in a statement. “We stay committed to bargaining until our members’ goals are achieved.”
Deere said it was “determined to reach an agreement” that would benefit workers. “We will keep working day and night to understand our employees’ priorities and resolve this strike, while also keeping our operations running for the benefit of all those we serve,” Brad Morris, the company’s vice president for labor relations, said in a statement.
The strike deadline was announced on Sunday after the union said its members had voted down the tentative agreement reached on Oct. 1 with the company, which makes the John Deere brand of tractors. Union negotiators had said the proposal would provide “significant economic gains” and “the highest-quality health care benefits in the industry.”
But workers, who are spread out across 14 facilities, primarily in Iowa and Illinois, criticized the deal for insufficiently increasing wages, for denying a traditional pension to new employees and for failing to substantially improve an incentive program that they consider stingy.
“We’ve never had the deck stacked in our advantage the way it is now,” said Chris Laursen, a worker at a John Deere plant in Ottumwa, Iowa, who was president of his local there until recently.
Mr. Laursen cited several sources of leverage for workers: the profitability of Deere & Company — which is on a pace to set a record of nearly $6 billion this fiscal year — as well as relatively high agricultural commodity prices and supply-chain bottlenecks resulting from the pandemic.
“The company is reaping such rewards, but we’re fighting over crumbs here,” he said.
Deere, long known to farmers for its green-and-yellow product line, is a publicly traded company valued at more than $100 billion. After a brief plunge early in the pandemic, its shares have tripled, far outpacing the overall market. They rose slightly on Thursday.
Steve Volkmann, an analyst with the investment bank Jefferies, acknowledged that Deere was doing well. “Crop prices have increased with every other commodity,” he said, “and when farmers make money, they tend to buy equipment.” And he said Deere’s leadership in agricultural technology had helped make it more profitable.
Mr. Volkmann said the financial damage from the labor dispute, if it was settled quickly, would be limited. The company’s bigger challenge, he said, comes from the pandemic’s disruption to the worldwide supply chain, which has caused shortages and raised prices for some components.
“Deere is already under some stress,” he said. “They’re not producing at full capacity anyway — they just don’t have the parts.”
As many employers grapple with worker shortages, workers across the country appear more willing to undertake strikes and other labor actions.
Last week, more than 1,000 workers at Kellogg, the cereal maker, went on strike, and Mondelez International, which makes Oreos and other Nabisco snacks, experienced a work stoppage this summer. Coal miners in Alabama have been on strike for months. Workers have also waged prominent union campaigns at Amazon and Starbucks.
Those on strike elsewhere in the country have raised similar complaints as the Deere employees, pointing out that they put in long hours as essential workers during the pandemic but are not sharing much of the profits that their companies reaped during that time.
“There was no reprieve — everyone was working seven days a week,” said Dan Osborn, the president of a Kellogg workers local in Omaha.
Mr. Osborn said his members were upset over a two-tier compensation system that they worry puts downward pressure on the wages and benefits of veteran workers. “Divide and conquer, it’s an age-old adage,” he said.
Union members at General Motors walked off the job for almost six weeks in 2019 before agreeing to a four-year contract that included substantial wage increases and closed disparities in a two-tier wage structure.
Under the tentative deal at Deere, wages would have increased 5 or 6 percent this year, depending on a worker’s pay grade, and then an additional 3 percent each in 2023 and 2025.
Pension benefits would have increased but would have remained substantially lower for workers hired after 1997, and many workers were disappointed to see benefits eliminated for new hires, Mr. Laursen said.
Other workers are perturbed about the lack of health care benefits for retirees, which also ceased for workers hired after 1997.
Analysts suggested that Deere might be wary of taking on additional long-term obligations because its current level of profitability is unlikely to last.
“It’s a very cyclical business,” said Ann Duignan, an analyst with J.P. Morgan. “They may be having record profits this year, but we believe we are close to a peak.”
Many workers were frustrated with similar elements of the last contract that the union negotiated with Deere, in 2015, and had been anticipating a showdown ever since.
“I’ve been saving since the last contract,” said Toby Munley, a Deere electrician in Ottumwa, where U.A.W. members voted to reject the previous contract, as did another local in Iowa. “People were feeling it then.” That contract was narrowly approved overall.
Looming over the negotiation is suspicion among rank-and-file workers toward the international union after a series of scandals in recent years involving corruption in the union and illegal payoffs to union officials from executives at the company then known as Fiat Chrysler.
The scandals led to more than 15 convictions, including those of two recent U.A.W. presidents.
Mr. Munley said he had worried that the U.A.W. would try to negotiate a marginally better deal and sell the membership on it before the strike deadline Wednesday night, but said he was encouraged that the union had held firm.
“I was happy to see we didn’t come back with a tentative agreement,” he said. “It restored some of my faith in my international.”
Nelson D. Schwartz contributed reporting.
U.S. Renews Its Support for the World Trade Organization
Jake Colvin, the president of the National Foreign Trade Council, which represents major multinational companies, said it was “fundamentally encouraging to hear Ambassador Tai reaffirm the continued commitment of the administration to the W.T.O.”
“That’s important and can’t be taken for granted,” he said. “I would agree with her, and the administration would agree with her, that the organization needs to show that it’s capable of addressing challenges and it’s not just trade for trade’s sake.”
Richard E. Baldwin, a professor of international economics at the Graduate Institute of International and Development Studies, posed questions to Ms. Tai after her speech. He was enthusiastic about the departure from the Trump administration’s harsh critiques. “I haven’t heard optimism and W.T.O. said in the same sentence in a long time,” he said.
In remarks at the Center for Strategic and International Studies in Washington on Thursday, Dr. Ngozi Okonjo-Iweala, the director general of the W.T.O., said that despite a bruising trade war, discussion of decoupling the United States and China, and pandemic-related shortages, global trade was actually at historic highs and the multilateral trading system continued to strongly benefit the global economy.
“To paraphrase Mark Twain, reports of the death of multilateral trade are greatly exaggerated,” she said. “Warnings of deglobalization are not matched by the evidence, not yet, at least.”
As the organization prepares for its meeting next month, W.T.O. members are divided over whether to grant a waiver that allows countries to bypass the intellectual property protections pharmaceutical companies have on their products to more quickly produce and distribute coronavirus vaccines to lower-income nations.
Backed by the progressive wing of the Democratic Party, the Biden administration has stated its support for the waiver. But it continues to face criticism, both from supporters who say the administration isn’t doing enough to provide vaccine access to poorer countries, and from the business community, which worries about the long-run effects of the erosion of intellectual property rights.