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One cheer, two jeers for job churn
January 23, 2007

Did you leave (voluntarily or otherwise) a job in 2005? If your answer is yes and if you live in the US, you are among 55 million Americans, representing 40% of the US workforce, who did so. That's a statistic that deputy secretary of the Treasury Robert M. Kimmitt points to with pride.

Writing in a Washington Post opinion column today, Kimmitt attributes this so-called good news to a "growing trend of dynamism in our job market, especially among younger workers." He writes glowingly that "the 12 months ending in November had the highest average of labor turnover since the U.S. government began tracking this information in 2000."

Americans are so much better off than workers in other developed nations. Kimmitt cites statistics showing that Americans get stuck in the same job for only 6.6 years, on average. Britons have to hold out for 8.2 years, the Germans for 10.6 years, and the French for 11.2 years. Pity the poor Japanese worker, who on average wastes away in the same job for 12.2 years.

There is truly good news in that 2 million more Americans were hired in 2005 than left jobs. But count me as one who is skeptical about all of Kimmitt’s spin.

Now, if you leave one job for a better one, that's great. But even Kimmitt doesn't seem to think that's happening all that often. Check out this comment: "...each move to a new employer can involve greater responsibility, greater pay, or both."

It should go without saying that a job with greater responsibility should bring greater pay. People acquiring new jobs with greater responsibility at less pay are probably not advancing up the career ladder in quite the way they might have hoped.

Kimmitt gives lip service to supporting portable health coverage and retirement savings plans in an effort to alleviate job-churn woes. But he doesn’t even address the psychological devastation that can accompany job loss, and he doesn't mention the fact that many of those 55 million who lost their jobs in 2005 may have languished for months while trying to find new ones. Plus, job churn involving relocation can tear apart two-career families.

I know that job churn is inevitable and I certainly don't fault companies for making the hard choices necessary to adjust to ever changing markets. But it should be government's role to ameliorate the downside of job churn and encourage employment stability for the benefit of families and communities. Instead, Kimmitt writes, "Government must...ensure that neither fiscal nor regulatory policy impedes the growing dynamism of our economy."

The fact that a government official is championing job churn as public policy is appalling.

Posted by Rick Nelson on January 23, 2007 | Comments (0)