IMCV - What The Big Quit Means For Businesses: Higher Costs Lower Profits

• U.S. employers are facing the worst labor shortages since WWII. The primary reason is unusually robust labor demand, even as the number of available workers is dwindling.
• Workers are quitting jobs at historical rates in search of better and better-paying jobs, compounding the record number of job openings.
• Falling population growth and widening skill and geographic gaps between jobs and labor will limit near-term improvement in labor availability.
• As a result, wages are rising at their fastest pace in at least 20 years as employers bid up pay to attract workers. Firms largely have been able to push cost increases onto consumers, limiting hits to their bottom line, but this ability will wane.
• Capital investments are raising worker productivity, but they are expensive and will not fully offset rising labor costs.

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