The unprecedented level of job switching seen last year as the U.S. labor market rebounded from the pandemic gave workers more leverage to ask for better pay and played a role in pushing inflation to its highest level in decades, a new study suggests, Reuters reported. An increase in the share of people who searched for jobs while they were employed helped boost inflation by about 1 percentage point throughout much of last year, according to a paper released on Monday by the Chicago Federal Reserve. That suggests job-switching at times accounted for roughly 20% of the price growth seen in 2021. "Workers' propensity to search for another job is an important driver of inflation," said Leonardo Melosi, a senior economist for the Chicago Fed and a co-author of the report. People who search for new work while they still have a job can end up with higher salaries — and more spending power — after switching jobs or receiving a raise from their current employer, the researchers said. Job switching took off last year as job postings soared and the number of people quitting reached record levels. Nearly 4 million Americans on average quit their jobs each month last year - often in search of better pay or more flexibility.
