The State of the American Workforce: Layoffs, Job-Switching and a Search for Balance

Job growth remains strong in the United States as the COVID-19 pandemic enters its fourth year. At the same time, higher interest rates have cooled the economy. American workers are worried about a potential recession, even as many continue to seek higher pay or are dissatisfied with their current roles or work environment, according to Morning Consult's annual State of Workers report. 

Job search growth was flat from March to April but remains in a broad uptrend since the start of the year, the data intelligence firm found. The prospect of higher wages continues to pull people back into the job hunt, with elevated search activity suggesting quit rates could tick back up. So, what are workers really thinking out there? Let's take a closer look at the survey of more than 6,000 employed and unemployed Americans to find out. 

Demand 'whiplash' rocks sectors like tech

Demand for workers has “whiplashed” since the start of the pandemic — first to tech, transportation and warehousing jobs, and then back to in-person services as consumers started dining out again and traveling more often, said Jesse Wheeler, senior economist for Morning Consult.

All of this represents a “huge reallocation of workers” from some sectors to others, he said. Meanwhile, economic and job growth are beginning to slow down. In an early warning sign, the share of U.S. adults reporting income losses increased considerably over recent weeks, according to Morning Consult.  

“Overall, the U.S. economy is clearly slowing as the Federal Reserve’s rapid tightening of monetary policy takes its toll,” Wheeler explained. “We could really start to see the shedding of jobs potentially in the coming months and an increase in unemployment, but we’re not seeing it yet.”

Morning Consult’s Lost Pay and Income Tracker rose 1.2 percentage points from March to April, with the sharp rise driven primarily by adults from higher-income households, reflecting the sweeping layoffs announced by tech companies like Meta, Shopify, Dropbox, Lenovo, Lyft, Roku and others.

“This is really a potential warning sign for the U.S. economy,” Wheeler said. “These high-paying tech and financial service companies have really been prioritizing projects and shedding workers to prepare for a potential lower-growth environment.”

Where are laid off workers now?

Despite shakeups in the tech industry, there are some indications that laid-off workers are finding new jobs fairly quickly. About 75 percent of those laid off in December and January were rehired or had a job offer within two months, according to polling from the hiring company ZipRecruiter.

Laid-off workers in the advertising, auto and transportation industries were most likely to land a new job quickly, according to the study. Somewhat surprisingly, 80 percent of the workers who found new employment after getting laid off said they didn’t have to take a pay cut.

People are still job-switching, and many find it to pay off 

A rising share of employed U.S. adults are being drawn into an active job search, with the prospect of higher pay as the prime motivator. Many are finding exactly that, with nominal wage growth higher among job-switchers than those who stay put. 

“Morning Consult data shows that by far the largest reason for job-seekers going out there and looking for a new job is the potential for higher pay, with 60 percent of U.S. adults who had looked for work in the past four weeks citing more money as the primary reason,” Wheeler said. “This impetus really aligns with the data out there that shows that job-switchers are still being rewarded over job stayers.”

As the U.S. economy heated up in 2021 and 2022, workers enjoyed a high degree of bargaining power they had not experienced in decades, demanding workplace flexibility and other perks. But the tables have turned, and many workers are now less picky about what they need from employers, according to Morning Consult's research. 

Although the upper hand seems to be shifting back to employers in many cases, they are still very much in need of workers, with nearly 10 million job openings according to the Bureau of Labor Statistics’ latest numbers.

Of those who are interested in leaving their jobs, Morning Consult found the top reason why is feeling underpaid, and that has not changed. It was also the top-ranked reason in 2022, followed by workers wanting a better work-life balance and feeling burnt out.

Add this to existing research from the job-search company Monster: 34 percent of job-switchers said there is no room for growth in their current role, and 26 percent are looking to escape a toxic work environment, compared to 40 percent in search of higher pay. This tells us that fewer demands around specific perks like childcare or remote work options doesn't mean employers should ignore company culture and employee morale. 

“The broad takeaway here is that while we’re seeing people be more cautious about wanting to leave their jobs, the underlying motivations why they would do so remain the same,” said Amy He, industry analyst team lead for Morning Consult.

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