You are using an older browser version. Please use a supported version for the best MSN experience.

New Data Finally Shows Why People Are Quitting Their Jobs. It's Definitely Not Because They're Lazy

Inc. logo Inc. 11/30/2021 Bill Murphy Jr.
New Data Finally Shows Why People Are Quitting Their Jobs. It's Definitely Not Because They're Lazy © Getty Images New Data Finally Shows Why People Are Quitting Their Jobs. It's Definitely Not Because They're Lazy

Often the simplest explanation for big changes is the obvious one.

For months, people have been trying to figure it out: If a total of 12.7 million people quit their jobs in July, August, and September, what are they all doing now?

Could it be that all 12.7 million people suddenly just aren't working?

If so, how do they eat and pay their rent or mortgages? And why aren't they showing up in the unemployment rate, which has been trending downward? At 4.6 percent, it's the lowest since the start of the pandemic.

Through it all, I've had a theory. Allow me to paraphrase myself from last month:

  • It's never made sense to me that a big part of the workforce was either in a position to quit with nothing lined up or foolish enough to do so anyway.
  • Instead, I wondered: Could a significant number of people be leaving jobs (especially lower-wage jobs) in order to try to become their own bosses? That's possible now -- not to say, easy -- in a way that would have been science fiction just a few years ago.
  • If this were true, then the whole "people are lazy and just don't want to work" complaint that some critics make would be turned completely on its head. But it might not show up statistically for a few weeks or months afterward.

Sometimes, the most obvious explanation winds up being the correct one. I didn't have data then to back this up, only anecdotes, but it seemed plausible.

Guess what? Now we have data.

And it seems to show exactly what I (and many other people, I'm sure) thought might be going on: A lot of people are quitting their jobs to go into business for themselves.

Check out these statistics reported in The Wall Street Journal, citing the U.S. government and other sources:

  • First, new Labor Department data shows that there are now 500,000 more unincorporated, self-employed workers than there were at the start of the pandemic: 9.44 million.
  • Next, the number of new applications for federal tax ID numbers jumped 56 percent between 2019 and 2021; two-thirds of those were for businesses expected to employ nobody other than the founder.
  • The percentage of workers in the U.S. who consider themselves self-employed rose from 5.4 percent in February 2020, just before the pandemic, to 5.9 percent now.
  • In September 2019, the online marketplace Etsy had 2.6 million active sellers; as of the same time this year, the number was 7.5 million.
  • And, there are similar signs from online career sites and marketplaces like LinkedIn and Upwork.

Overall, I think this is a positive development. (Although it probably doesn't matter how anyone feels about it; this trend is happening.)

Whether they were driven by fear of Covid, or the realization that they didn't want to give up flexibility, or lack of child care, or if they simply took stock and realized they'd rather take a bit more control of their own destinies, this wave of newly self-employed workers could explain a lot.

Will it be a permanent shift? Time of course will tell.

But if you're a business leader, even if it means it's now marginally harder for you to hire great people, or even if it means that one of your employees has left to become a competitor, I think you should take some pride in this trend.

Because the way we identify the world's greatest leaders isn't just to see how many followers they have, or even whether they wind up leading their teams to achieve whatever their next objective might be.

Instead, one of the best measures of a leader is whether he or she inspires others to follow their own dreams, and even become leaders in their own right.

It's messy, and it can be painful, and sometimes it's hard to track. But right now it seems like a lot of people are doing exactly that.

AdChoices
AdChoices

More from Inc.

image beaconimage beaconimage beacon