Bahat: What has been your perspective on the Lie Flat movement?
Erin Lowry: My first response when I saw Lie Flat take off in conjunction with the Great Resignation was to have a conversation about mental health and why burnout is a large part of the reason people are opting out.
Allison Schrager: But there are always trade-offs. I wrote my column to say that these are critical years, and the choices you make now can last a long time.
Alexis Leondis: I’ve been concerned about the things you should be thinking about if you do want to leave your job, or decide that you’re burned out — everything from health insurance to taxes.
Bahat: We’ve been hearing about the rising quits rate, Lie Flat and the Great Resignation. What exactly is going on here?
Schrager: The quitting is definitely a bit of a mystery. Initially everyone thought it was because of high unemployment benefits and all the money we sent people. Some people are coming back to the labor market, but if you crunch the data, you’re still seeing elevated rates of people leaving the labor force and not getting a new job right away. I was surprised to see that almost all the high quit rates have been among people with a high school education or less. Some are actually re-skilling — using this time and money to gain new skills to get a higher paying job, rather than just quitting because they’re burned out. And a lot of women in particular still have huge childcare issues.
Lowry: Lie Flat and the Great Resignation are certainly related, but they’re two different phenomenon. College-educated millennials in particular feel that they were sold a bill of goods that was never really delivered in the way that was “promised.” Then you add a global health scare on top of the burnout, and all of a sudden we’re thinking more critically about what we want out of life and what we want out of work.
Leondis: I agree the two are related but motivations for each are slightly different. For new college graduates, the job market is booming, especially if they’re in science or engineering. But for those who graduated just a year ago, they’re really struggling. It’s another example of how the labor market can be so weird. We’re in a very unprecedented time and it really depends on what the demand is and what the industry is to get a sense of who’s finding a job and who isn’t, and how quickly it’s happening.
Bahat: Is cryptocurrency part of the story? Mark Cuban tweeted that 4% of the quits are because of newfound crypto wealth.
Schrager: That could be a factor for some people, but I doubt it’s a big one because more quits have been among people with less education who tend to have less savings. If people are getting rich on crypto and are quitting their careers for that, I’d recommend they cash out now and lock those gains in.
Bahat: How is this shifting the power balance between men and women?
Schrager: Every time you have a big economic shock, it tends to accelerate trends. Routine jobs that tend to be more physical have been going away in each recession and tend not to come back. So what we see in each recession is the male participation rate slowly falling. While we certainly see women leaving for childcare issues, and their quits have been elevated throughout the pandemic, I think we’ll see more long-term consequences for men, because their jobs tend to go away and not come back.
Lowry: So many of what we would traditionally consider “blue-collar” jobs now require a bachelor’s degree or a certain amount of technical school or trade school to be eligible for hiring. That’s creating a challenge for people to secure even a middle-class existence on the same basis that was formerly available to previous generations — but not anymore to millennials and Generation Z coming up.
Read More:Young People Lying Flat Has Been a Long Time Coming: Erin Lowry‘Lie Flat’ If You Want, But Be Ready to Pay the Price: Allison SchragerDon’t Let Stock Options Keep You From Leaving a Job: Alexis Leondis
Bahat: What’s the cost of Lying Flat? How are people’s long-term career plans changing, or how should they change?
Leondis: This is a really good time for people to step back and think about what they’re doing and the industry they’re in and if, long-term, that’s the place they want to be. If you’re choosing to be in more of a frontline industry or a services industry, then you really have to decide whether you’re willing to deal with the trade-offs and risks that come along with that.
Schrager: When I wrote about lie flat, I was writing about people on more of a high-powered career path. While I understand a lot of them may feel burned out now — it’s been a trying 18 months — one thing they have to keep in mind is that these are very prime earning years. If you look at wage paths for college educated people, they’re very steep in your 20’s and 30’s, because that’s when you’re getting skills. And for most people that’s not a very pleasant process, and that’s been true for all generations.
Among less-educated people who don’t have as many options, this is a great time to flex some worker power and find a career that offers more advancement.
Lowry: I do find it fascinating that with the rise of technology there’s been a rise in the amount of leisure time people have, which has afforded the opportunity to put more emphasis on mental health and to have conversations around that. So the question really comes down to what people are going to choose to prioritize, the wealth potential, or the personal holistic satisfaction potential, and I don’t think there’s necessarily a right or wrong answer.
Leondis: If you do choose your personal well-being and health over your wealth, what does that mean for your job prospects down the line? For those who are choosing to sustain their careers but working from home or embarking on a different track, they’re probably going to be losing out to those who go into the office every day where they’re being seen, both figuratively and literally.
Bahat: Given the current rate of inflation, how much risk are people taking when they choose to Lie Flat?
Schrager: A lot. Lower-track jobs don’t keep up as quickly with inflation. If you’re taking time out of the labor market, inflation should worry you not only because it’s eroding the savings that you’re living off of, but because the Fed could start raising interest rates and more aggressively tamp back on the economy, which means unemployment might start rising again and it might be harder to find a job. Right now it’s a very advantageous labor market for a lot of people, but if we really get serious about cracking down on inflation, that might not be for long. With a high inflation environment, you don’t know what the economy is going to be next year.
Lowry: I’m curious how many of those people who choose to leave a position due to burnout — the Great Resignation, Lie Flat or whichever — will still try to generate an income in a different way. That could mean turning to some version of the gig economy, so that they’re still earning an income and can continue to invest and contribute to retirement accounts. Because, particularly in your 30’s, it could put you in a precarious situation to completely tap out of the labor force and press pause on being able to contribute to investment accounts for your future self.
Bahat: What should employers be doing differently?
Lowry: Pay people better. It’s interesting to me how often you look at these perks that employers try to provide which are basically here’s how we keep you at the office at the office for longer and longer periods of time and keep you happy about it. Raising wages, is what will keep people, at least for a period of time, more content.
Leondis: Employers, especially for white-collar jobs, talk about all the ways they’re going to be more flexible with employees, but at the end of the day the most important thing is how much you’re making. Especially for people with children who are trying to make a decision about whether both parents work or if one should stay home with the kids, that’s how they make those decisions, by running the numbers. The other flexibility stuff sounds nice, but it really comes down to what you’re earning.
Schrager: It’s easy to say you should just pay your workers more, but most people are working for companies that have fairly thin profit margins, so it’s not so easy to raise pay, unless they hire fewer people or start offering other perks. I think we’re going to be seeing more people more dependent on the Walmarts for employment, because they can afford to raise rates when other companies can’t in their industries. So maybe they get the higher quality employees.
Bahat: Is the prescription just, fire your bad managers?
Schrager: When the labor market wasn’t as competitive, people didn’t take culture and management seriously. Management was kind of an afterthought. You don’t have to fire them, but maybe retrain them and make them realize that you have to make people feel valued.
Leondis: The labor shortage is forcing a reevaluation of who employers decide to make a manager. We’ve all been in jobs where someone thriving in a position is promoted, but it doesn’t mean they’ll be a particularly skillful manager. So it forces companies to think about whether they’re promoting the right people into a role that fits for them. Management isn’t for everyone.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Allison Schrager is a Bloomberg Opinion columnist. She is a senior fellow at the Manhattan Institute and author of “An Economist Walks Into a Brothel: And Other Unexpected Places to Understand Risk.”
Alexis Leondis is a Bloomberg Opinion columnist covering personal finance. Previously, she oversaw tax coverage for Bloomberg News.
Erin Lowry is the author of “Broke Millennial,” “Broke Millennial Takes On Investing” and “Broke Millennial Talks Money: Stories, Scripts and Advice to Navigate Awkward Financial Conversations.”
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