‘Why Job Churn is Good’

By January 24, 2007Economy

Excellent op-ed in yesterday’s WaPo (sorry, got busy with all the SOTU coverage) by the above title by Deputy Treasury Secretary Bob Kimmitt. Working from data from the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS), he points out the impressive — and positive — nature of the job churn here in the us. Among his points:

  • More than 55 million Americans left their jobs in 2005, but there were over 57 million new hires that same year.
  • The 12 months ending in November had the highest average of labor turnover since the U.S. government began tracking this information in 2000. But new hires in America exceeded employee separations by an average of 364,000 per month.
  • Job tenure averages 6.6 years for Americans, compared with an average of 8.2 years for Britons, 10.6 years for Germans, 11.2 years for the French and 12.2 years for the Japanese.
  • On average, workers in the United States will have 10 different employers between ages 18 and 38.
  • In December, the average duration of a job search was the shortest in more than four years.
  • U.S. productivity has steadily accelerated over the past three decades, as workers look to improve their standard of living and pursue different opportunities through new employment.
  • Kimmitt makes the case for education (echoing the President’s theme last night) and for portability of benefits, so as not to get in the way of this positive “churn.’ Fact is, in any vibrant economy, jobs are lost and created. The idea is to net out to a positive number, which we have consistently done here on the US. Amidst all the scare about globalization, these are some welcome and much-needed facts from Kimmitt.