Workers aren’t quitting their jobs. Here’s why that’s a problem for the labor market.
Job-seeking Americans have one more thing to worry about: Workers clinging on to their jobs.
People’s willingness to leave their jobs is widely seen as a barometer of confidence in the labor market. And right now this indicator is blinking red. According to the Ministry of Labor data, the rate of employees who quit their jobs in January was 2% and New York Federal Reserve’s February survey data It showed that the likelihood of employees voluntarily leaving their jobs next year has reached a record low in data dating back to 2013.
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“The likelihood of losing your job hasn’t increased that much. But if you lose your job, the likelihood of finding a new job becomes less likely,” Laura Ullrich, Indeed Hiring Lab’s director of North American economic research, told Yahoo Finance.
“This is especially true in industries where hiring and turnover rates are low,” he added, “where they’re finding there’s no room for new people.” ullrich pointed out The government, financial operations, and manufacturing sectors all have turnover rates below 1.5%.
In an economy that has barely sustained payroll growth outside of the healthcare industry, and amid persistent fears of AI-driven layoffs, it makes sense for those with jobs to treat them like precious jewels.
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A sign with employment-related information is displayed at a job fair in Dallas on January 14, 2026. (AP Photo/LM Otero) ·RELATED PRESS
The Federal Reserve’s Beige Book The Boston Fed hinted at the trend this month when it reported an increase in applicants and “some experienced employees are applying for lower-level positions.” The New York Fed also noted that “labor supply continues to exceed labor demand overall,” while the Cleveland Fed found that “the availability of qualified candidates has increased as large firms slowed hiring.”
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Intense competition for jobs, combined with workers’ reluctance to leave their jobs, gives employers the upper hand. Salary increases for those who change jobs slow down, According to data tracked by ADP, In data dating back to 2020, leavers’ bonuses reached a record low in February. This may further encourage staying put, as wages for those who stay in employment are more stable.
Taylor Bowley, an economist at the Bank of America Institute, also flagged this pattern in a March 3 note, writing, “Average wage gains associated with a job change remained modest for both men and women, with January levels less than half the 2019 average.”
“Looking ahead, if ‘low hiring, low firing’ continues to characterize the labor market, the job change premium could be further squeezed, limiting the scope for workers to achieve meaningful wage increases by switching roles,” Bowley wrote.
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Jasmine Escalera, career expert at MyPerfectResume, said: october survey A study by the employment assistance platform found that 65% of workers plan not to look for a new job in 2026.
The question is, is it “because they are satisfied or because they are afraid?” is. Escalera said. Signs point to the latter, at least for some.
“We see that it takes a long time for people to find jobs,” Escalera said. “And it’s not about qualifications or skills; it’s about competition in the market. It’s actually really sad for job seekers.”
Actually, long-term unemployment scares youp, As of February, a quarter of unemployed Americans have been unemployed for 27 weeks or more. Anyone who follows this trend and still has a job, no matter how bad, might be a little timid about jumping ship.
That appears to be especially true for workers under 24, who have the highest turnover rate in 2024, said Lauren Thomas, an economist at Deel, a human resources firm. He said they now generally stay where they are and have experienced the sharpest decline in job switching among other age groups.
Their concerns are not without reason. In New York City, long a place where young job seekers flock, entry-level postings fell more than 37% between 2022 and 2024, according to a recent study. Report from the Urban Future Center. If you’re at the beginning of your career, looking for a new job may force you to enter the most problematic job market in recent years.
“There’s a good reason for people to leave their jobs, whether it’s moving to a position with better opportunities or better pay, changing industries, or moving to a new city,” Ullrich said. “When labor market losses are eliminated and layoff rates are low — which they are — you don’t have opportunities for new people to come in.”
Emma Ockerman He is a reporter for Yahoo Finance, covering economics and workforce issues. You can reach him at: emma.ockerman@yahooinc.com.
