As the effects of the Spanish Flu abated in 1919, workers in Seattle became restless. Many were fed up with long working hours and mediocre wages, especially in times of high inflation. Shipyard workers went on strike, causing others to lower their tools in solidarity. The newspapers were filled with stories of stagehands, firefighters and painters quitting. The events in Seattle sparked social unrest across the rest of the country and much of the wealthy world. Bosses feared the lower classes had become shy anti-capitalists at work.
Seattle again appears to be the starting point for a big shift in labor relations. In October, the local carpenters union ended a weeklong strike over wages and terms. Hotels and stores remain understaffed. Local tech companies, worried about losing staff, have increased average wages by nearly 5% since 2020. Microsoft, one of them, said earlier this year that 46% of the workforce world planned to make “a major pivot or career transition.”
Seattle appears to be an example of what Anthony Klotz of Texas A&M University called the “big resignation”. This memorable term quickly became a corporate buzzword, popping up on corporate earnings calls and at cocktail parties. It has also made waves online. An “anti-work” bulletin board on Reddit, a social media site, is filled with screeds against the demands of greedy bosses. The forum now generates more user comments per day than the “WallStreetBets” subreddit, which moved the stock markets earlier this year.
The term is elastic, but in essence it suggests that the pandemic has caused a cultural shift in which workers are reassessing their life priorities. People in lower status jobs will no longer put up with bad wages or bad conditions, while white collar types scoff at the idea of working long hours. Some people have become lazier or more empowered; others want to try something new; others desire less money because they have realized the joys of a simpler life. This is, supposedly, leading to a tsunami of quits and dropouts. There is one catch, however: The theory has little hard evidence to support it.
The great resignation thesis seems strongest in America and Britain. In September, a record 4.4 million Americans left their jobs (see chart 1). In the third quarter of the year, nearly 400,000 Britons moved from one job to another after handing in their notice, also the highest level on record. There is indirect evidence that employers are responding to the threat of new starts as well. According to a tracker compiled by Goldman Sachs, a bank, wage growth in both countries is unusually high (see chart 2). A weak employment report for America, released on Dec. 3, appears to confirm just how difficult it has become to find staff, even as vacancies remain near record highs. The world’s largest economy created just 210,000 jobs in November, below economists’ expectations of 550,000.
In other parts of the wealthy world, however, a great resignation is more difficult to spot. It is certainly true that millions of people have given up their jobs. Our best guess is that the workforce in the rich world is 3% less than it would have been without covid-19, a shortfall of 20 million people. Yet outside of the United States and Britain, there is little sign that this reflects more people giving up.
In October, 96,000 Canadians who had quit their jobs in the past year did so because they were “dissatisfied”, up from 132,000 on the eve of the pandemic. In Japan, the number of unemployed people who left their previous job is near an all-time low. New Zealand’s data on labor market “flows” seem quite mundane. There are signs of a slight increase in quits in Italy, but across the EU as a whole, the flow of people from work to leisure is lower than before the pandemic. And in many places, there are few signs that workers are getting bolder, which you think could portend an increase in quits. The number of industrial disputes in Australia continues to decline. Collective labor disputes are “on the verge of extinction,” according to a recent issue of Problems of work in Japan, review. If the pandemic has changed the way workers look at the world, they hide it pretty well.
Other factors therefore probably help to explain the decline in the labor force. Many people still say that they are afraid of catching covid-19 and therefore can avoid public spaces, for example. The immigrants returned to their country of origin.
Even though a wave of quits is largely an Anglo-American phenomenon, is there any evidence that people who quit do so because they have become shy at work? Despite the posts on Reddit, this does not appear to be the case. In Britain, a tenth of workers say they would like a job with fewer hours and less pay, but that’s the long-term average. A recent study from Gallup, America, suggests that “employee engagement,” a rough indicator of job satisfaction, is near its all-time high: hard to reconcile with the idea many more people are looking for. desperately a way out.
This suggests two other prosaic explanations for skyrocketing dropouts. One concerns vacancies. When there are a lot of open positions, people feel more confident to give their opinion, even if they rather like their jobs. They can also be poached. Job vacancies are huge right now, in part because the pandemic has led to increased demand in new industries (for example, online retail warehouses). The analysis of America by Jason Furman of Harvard University and of Britain by Pawel Adrjan of Indeed, a job search site, suggests that job departures are where you would expect them to be. that they receive the number of vacancies.
The analysis of MM. Furman and Adrjan can nonetheless underestimate how trivial the upsurge in resignations really is. In both countries, resignations sank at the worst of the pandemic in mid-2020. Many people who would have liked to leave a position last year may not have found the courage to do so until now. Account of these “pent-up” resignations, and the recent recovery seems even less unusual.
Could a real “big resignation” ever emerge? This would probably require more radical cultural changes. Households would have to decide, en masse, that their future consumption needs, and therefore their necessary incomes, would be significantly lower. That would mean more vacation abroad, fewer restaurant meals, and fewer household appliances. It would mean fewer Christmas presents. Anyone who has visited a Black Friday sale this year, in Seattle or elsewhere, would be quickly disillusioned that such a change was on the agenda.
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