A new report by CareerBuilder and Economic Modeling Specialists shows labor market churn rates, the job-to-job movement of tens of millions of people leaving jobs, and tens of millions hired to fill the newly vacant positions, is lagging behind job creation. The national churn rate went down by 23% during the recession and remains below pre-recession levels.

"Churn measures the pulse of hiring activity in an economy," says Matt Ferguson, CEO of CareerBuilder and co-author of The Talent Equation"Low churn rates mean fewer workers are moving to jobs that better utilize their skills, which in turn can lower productivity for companies and stall wage growth for individuals. Through 2013, churn rates in most occupations had not yet recovered significantly, but we expect that to change as workers gain confidence in a labor market that continues to improve and expand." 

Total non-farm jobs in the U.S. stood just shy of 133 million at the end of 2013, about 1.4 million short of the high in 2007 but 6.1 million more than in 2010. However, the churn rate through 2013 only eked up from a low of 64.8% to 68.1%—far short of the mid-2000s, when the churn rate was at 85% and 86%.

Key Findings

The churn rate has fallen in every major occupation group over the last decade, although not surprisingly low-wage occupations have the highest rates of annual churn. While no occupation group has fully recovered from the recession, production occupations saw the strongest rebound in churn rates, regaining 35% of the decline. 

The cities with the most severe declines in churn from 2003 to 2013 were North Port-Sarasota-Bradenton, Florida; Virginia Beach-Norfolk-Newport News, Virginia; and Tampa-St. Petersburg-Clearwater, Florida. All three went from over 110% churn in 2003 to just over 70% in 2013. 

Among the 75 most populous metro areas, Boston is the only one that saw an increase in churn over the last decade. It also had the highest average churn rate from 2010 to 2013, at 87.5% – just ahead of Raleigh, North Carolina. Raleigh tied with Bakersfield, California, and Indianapolis for the sharpest upticks in churn from 2010 to 2013. 

Why the stubbornly slow rebound? The EMSO blog says it could be workers aren’t as confident in the labor market as they were before the recession. "There’s clearly a psychological element in play when workers weigh whether to leave a company or stay with the job (or jobs) they have."

In September, the number of voluntary separations was at the highest level since April 2008. While that can clearly be called encouraging news, it also only gets us back to levels seen during the heart of the recession.

The net effect of staying put

By job hopping from employer to employer, particularly early on in a person's career when it is more widely accepted, workers can often find jobs better-suited to their skills, while building up both their résumés and their salaries.

Anthony Carnevale is an economist who directs Georgetown University's Center on Education and the Workforce. He told The Wall Street Journal in this article, ""One of the characteristics that is uniquely American is that changing jobs is the way you get promoted." 

Just last Friday the November jobs report was released, showing hiring levels not seen in some 15 years. The feds say it puts 2014 on track to be the healthiest year for job growth since 1999.

However, Carnevale says the improvement masks the fact that many workers who held jobs throughout the downturn and recovery struggled to advance, with many earning less than they did before the recession. 

In fact, over the past 12 months, hourly pay has risen just 2.1%, barely above the current inflation rate of 1.7%.

To view detailed data and interactive charts from the reportvisit EMSI's blog

Tags: Careerbuilder, The Wall Street Journal, Unemployment, Recession, Minimum Wage, Economic Modeling Specialists, Job churn, Hiring figures, Labor market, Hiring levels, Matt Ferguson, Anthony Carnevale