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Economist Betsey Stevenson: Labor Market ‘Weirdness’ a Byproduct of Abundant Opportunity

by Catalyst Corporate | Sep 28, 2021

Across the country, some 320,000 people work for credit unions now. According to a report by IBISWorld.com, the number of people employed in America’s credit unions increased an average of 2.8 percent from 2016 to 2021.

But will credit unions be able to find the workers they want in the coming months? That could be a challenge, according to Betsey Stevenson, a well-regarded labor economist who presented at Catalyst Corporate’s Economic & Payments Forum last week.

A combination of issues related to the COVID-19 pandemic and a growing economy has boosted confidence among workers, said Stevenson, a professor of public policy and economics at the University of Michigan.

“We saw job quits hit their record high of four million in July,” Stevenson told attendees at the virtual Forum. “That's happening because there's so much opportunity out there. Employer job reallocation has absolutely doubled, so people are twice as likely to have changed jobs over the past year compared to 2019.”

Citing an August 2021 Bankrate survey, Stevenson said 55 percent of Americans in the labor force want to seek new employment in the next 12 months.

“The U.S. economy is in the midst of a huge reallocation of people. The reason we're seeing so much weirdness in the labor market and economy is that it’s become like a big game of musical chairs. People have walked into a room and everybody's standing around, looking for the seat that’s the best fit for them,” continued Stevenson.

“Initially, when the pandemic struck the U.S. in March 2020, people felt a great deal of uncertainty about their future,” Stevenson said. “Now, that fear has receded and they’ve had time to reflect on their career, and they’re asking themselves what they really want from their job and life.”

Stevenson predicted the labor shortage will begin to fade away once people decide what they want to do and employers find the right people.

“Recovery in the labor force requires getting people into jobs and then keeping them there,” said Stevenson, who added the “return to normal” will be a slow process.

Whether employment figures, interest rates or housing starts, numbers are always on the move. You can keep up with the latest economic trends impacting credit union operations with Catalyst’s weekly Behind the Numbers news publication. Our experts will deliver insights directly to your inbox – sign up for this no-cost commentary here.