Freedomnomics

Article published Sunday, June 24, 2012, at Fox News.

A Nation too scared to quit

By John R. Lott, Jr.

In case you missed it, hiring fell a staggering 9 percent last month. The hidden secret is how bad hiring has been throughout the “recovery.” Economists say the recovery started in July 2009 — but the jobs picture still looks more like a recession. New hires not only fell during the recession, they’ve kept on falling during the “recovery” — something that isn’t supposed to happen. The economy has added jobs for 20 months, but very slowly. The total number of jobs has grown by just 1 percent during the 36-month “recovery.” In all past recoveries since 1970, the average job growth in the first 36 months is 7 percent. The story gets even worse when we look more closely at that small increase in jobs. In the year and half before the recession, new hires averaged 5.25 million per month. During the recession (December 2007 to June 2009), they fell dramatically to 4.39 million, hitting 4.2 million per month in December 2008, right before Obama became president. Yet, instead of rising as they normally would in a recovery, new hires now average just 4.08 million per month. The latest data, released on Wednesday for May, show just 4.18 million — a number still well below the average during the recession. So how can we be gaining jobs when new hires have fallen? Because an unusually large number of people are staying in the jobs they already have.

A drop in total job separations can be a good thing — if, for example, the cause is a decline in layoffs. But that’s not the case. Rather, there’s been a serious drop in workers quitting — presumably because they fear not being able to get a new job.

More than 1 million fewer Americans a month are quitting their jobs than before the recession.

Quits aren’t supposed to be falling during a recovery. During a recession, sure: With poor prospects of landing a good new job quickly, people hesitate to voluntarily leave.

But the opposite is supposed to happen in a recovery: People sense opportunity, and they chase it. (The rebound is especially strong after longer recessions, as people who’ve been putting off quitting finally decide it’s safe to bite the bullet.)

Yet now we have a “recovery” where Americans have grown even more fearful about quitting their jobs.

This is confirmed by another often-noted problem: Since the recovery started, reports the Bureau of Labor Statistics, the number of people who have given up looking for work (and so are classified as “not in the labor force”) has grown by 7.2 million.

So, while the actual number of people with jobs is up by 1.9 million, more than 3 1/2 as many Americans have given up hope of finding work. Again, that’s something we normally see in a recession, not a recovery.

Not hard to see why so many people who have jobs don’t dare quit.

With these actual job numbers, it’s hardly surprising that a June Rasmussen poll finds 62 percent of voters think that the country is still in a recession.

John R. Lott Jr. is a FOXNews.com contributor. He is an economist and the author of "More Guns, Less Crime." He is co-author of the just released "Debacle: Obama's War on Jobs and Growth and What We Can Do Now to Regain Our Future” (John Wiley & Sons, March 2012). Follow him on Twitter@johnrlottjr.

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