The coronavirus pandemic was not only a public health crisis and an economic crisis. According to numerous anecdotal reports, it’s also led to a torrent of burnout among the workers fortunate enough to have kept their jobs through the pandemic. Many, who could afford to, were inspired to quit their jobs and move in search of some post-pandemic adventure, like starting a dream job or business. The New York Times dubbed it the “YOLO Economy.”
Multiple surveys have found workers are considering or planning to look for a new job. A recent Prudential survey indicated that 1 in 3 millennials plan to look for a new job with a different employer once the pandemic is no longer a public health crisis, compared to only 10% of baby boomers.
While stories about relocating to a cheaper town or taking a chance on a new venture are enticing, such big moves come with a certain degree of risk, and potentially a pretty hefty earnings penalty, warn experts.
According to Payscale research, unemployed workers face a 4% wage penalty which increases to 7.3% if their period of joblessness lasts longer than a year.
“You are kind of rolling the dice, depending on how long you’re planning on being out of the labor market,” warns Greg McBride, Bankrate's chief financial analyst, who says the pandemic is causing major lifestyle and career changes. “People…have been kind of bottled up at home and they have cabin fever or [are] just feeling the need for a change,” he said.
Many millennials have incentives to quit and move to other parts of the country because remote work has allowed it during the pandemic. Some states have accelerated the war for talent by actually offering cash incentives for workers who choose to relocate. West Virginia, for instance, is offering $12,000 with no-strings-attached.
The surge in startup investing during the pandemic has also been a major incentive for millennials jumping on the YOLO bandwagon, says McBride. According to PwC and CB Insights' Q4 2020 MoneyTree report, startup funding hit a record high in 2020 as U.S. based, venture capital backed companies raised nearly $130 billion.
“There’s a lot of private money flowing around in terms of private equity, venture capitalists. So a lot of startups are getting funding and getting repeated rounds of funding,” said McBride. “That’s facilitated…the type of growth that I think can be attractive to somebody who's either looking to do something different in their career, or just maybe looking to jump start their career and view an up and coming company as a way to do that.”
However, McBride warns millennials to still “look before you leap,” in case that dream business falls through.
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