Quiet Quitting? Quiet Firing? More Like Quiet Retiring

Much has been written about the ever-changing labor force in the last year. What started as a social and professional experiment in remote work out of necessity due to the pandemic morphed into a panoply of perspectives on the future of work. (Spoiler alert: We still need it.) One such narrative paints employers as always looking for ways to take advantage of workers in what might be called “task creep,” or being expected to take on tasks that are outside of the scope of their stated roles. What might have once been a way to get a leg up and impress at the office has become, in some circles, a rallying cry for employees to say no to special projects without appropriate compensation or recognition (potential career advancement notwithstanding). In response, employers have branded such employees who are not willingly “doing whatever it takes” as instead “doing the bare minimum.” Taking this one step further, some managers are engaging in behavior that in the past might have been labeled “constructive dismissal,” a problematic action defined in employment law, but is now being branded as “quiet firing,” much to the delight of poets and wordsmiths everywhere. While this growing antagonism seems perfectly on-brand for today’s society as a whole, we don’t see how it helps the very real economic challenge presented by today’s evolving workforce.

Full Employment: The Fed’s Frenemy

As part of their efforts to predict when the current economic cycle might turn, many economists have cited a variety of workforce metrics, from unemployment rate and productivity to labor force participation and job openings. If we look at these data points since the start of 2019 (Figure 1), we can provide context for much of the analysis we have been reading and hearing.

Of course, the most obvious statistic is the unemployment rate. With the Fed's focus on reducing consumer demand to fight inflation, stubbornly tight labor markets pose a challenge. After all, the lower the unemployment rate, the more people there are who have income to spend. Some have even cast the Fed's battle with inflation and demand as an implicit war on employment, where they must intentionally cause some material number of job losses if they are to tame price increases and succeed in reaching their 2% inflation target.[1] As we can see from the charts in Figure 1, the unemployment rate has returned to lows seen prior to the pandemic. Put another way, the Fed has some support for aggressive tactics to lower inflation, and if the cost is slightly higher unemployment, the economy can withstand an increase from currently low levels.