From restaurants across the country closing early or completely due to a staff shortage to signing bonuses stretching into the six-figure range, evidence of the power workers wield in the American labor market is everywhere.
The combination of near-record numbers of job openings and too few job seekers to fill them has put American workers in their strongest bargaining position in decades.
On Tuesday, the US Department of Labor will announce the number of workers who told their employer “I quit” in December, as well as the number of job offers at the end of last year.
In November 2021, 4.5 million Americans voluntarily left their jobs – an all-time high. The phenomenon gave rise to what is known as the Great Resignation, but Bharat Ramamurti, deputy director of the White House National Economic Council, called it “the Great Upgrade”.
That’s because traditionally low-wage sectors like accommodation and food services; health care and social assistance; and the transportation, warehousing and utilities sectors are seeing the most workers headed out.
Never before in my life have I quit a job without giving two weeks notice.
Many are leaving for bigger paychecks and better benefits as employers sweeten compensation packages to attract scarce workers. The Employment Cost Index, which measures changes in wages and benefits, rose 4% in December from a year earlier. It’s the biggest leap in two decades.
But more money isn’t the only thing workers are looking for. “What is important in the Great Resignation are the reasons for which one resigned. They are different from the typical reasons of the past,” said Dan Cornfield, a sociologist at Vanderbilt University who specializes in labor markets.
He told Al Jazeera that workers quit for a variety of reasons ranging from wanting more flexibility to taking extended leaves and even starting their own businesses, which is exactly what Lydia Schmidt is doing.
Schmidt was supposed to start graduate school in Portland, Oregon this fall, but the high cost of tuition caused her to change her mind. “I was released on bail the week before school started and scrambled to find a remote job,” she told Al Jazeera.
Within three weeks, she landed a remote customer support position with a Seattle-based outdoor gear and apparel company. She spent 40 hours a week answering calls to help customers return items or offer shopping advice.
“The week before Thanksgiving, it started to get really busy and didn’t stop. It just got worse and worse,” Schmidt said. Thanks to labor shortages and shipping delays , calls from angry customers increased, she said. “I was getting so exhausted and stressed from work. I was getting paid like crap, I felt overworked quickly.
In January, she stopped abruptly. “Never before in my life have I quit a job without giving two weeks notice,” she said.
Schmidt is a surfer who, after meeting several women in the water who run their own businesses over the years, takes the opportunity to do the same. Like many Great Resignation workers, she is looking to start her own business – in her case, offering virtual assistant services to entrepreneurs and small business owners in the outdoor industry. She says she looks forward to being independent and having a job that better suits her nomadic lifestyle split between Oregon and Mexico.
Reset standards
According to Cornfield, Schmidt’s desire for greater flexibility and better work-life balance has become a common feature of the pandemic workforce, and one of the ways the Great Resignation resets labor standards.
“All of this sends a strong signal to employers,” he said. “There is a desire among many workers – mostly young adults who have a college education – that they want more transparency from management and even collaboration with management. They also want a progressive focus on social justice issues like Black Lives Matter and economic justice.
Other workers like Jeneba Wint, a technology specialist based in Charlotte, North Carolina, use the big resignation to take a step back from work.
“I’m a millennial older, which means now that there’s a big quit, I can actually participate,” she told Al Jazeera. “I was in the age group that went through the Great Recession. I learned several skills and I have so much work experience and I’m in a good financial position, so I decided to take a break in my career in the fall of 2021.”
All of these dropouts send a strong signal to employers.
Wint said that while the hiatus was initially scary, the deluge of emails she receives from tech recruiters has left her confident that she’ll easily land another job when she’s ready. “If we’re lucky and live long enough, we’re going to work a long time, so why not create opportunities for career breaks? ” she asked. “Step back, relax and think about what we want to do next – that’s exactly what I’m doing right now.”
Betsey Stevenson, an economist at the University of Michigan, said the moves of those like Schmidt and Wint fuel another underlying feature of the Great Resignation – an increase in labor turnover.
“We’re seeing more hirings and more quitting, but we’re not really seeing more layoffs or separations,” Stevenson told Al Jazeera. “It reflects the fact that people didn’t want to move [jobs] for a while during the pandemic, which was a terrible time to change jobs.
The coronavirus pandemic has also caused workers in the health sector – and other sectors that depend on essential workers who have faced an increased risk of catching COVID-19 on the job – to seek work elsewhere. For flight attendants, retail workers, etc., “your company may have a policy that everyone must wear a mask and now you find yourself stuck enforcing mask mandates among an audience of more more hostile,” Stevenson explained.
She sees the Great Resignation as an opportunity for workers to find jobs with the amenities they want, from the ability to work remotely to gigs where they aren’t required to be vaccinated, and well in between. The more people leave their jobs for something better for them, the more they create vacancies that others can move into. “It’s a process that should work out on its own,” Stevenson said, adding that despite the myriad reasons workers give for leaving these days, pay remains the central factor.
“Searching for a better paying job has always been the case when workers change jobs,” she said. “If you look over decades, salary growth usually doesn’t happen because your boss gives you a big raise. This usually happens because someone makes you an outside job offer.
When it comes to companies winning the war for talent, Stevenson says jobs have always been “a bundle of amenities” that can be seen as positive or negative depending on an individual worker’s preferences. “The question,” she said, “is what is the set of amenities that I have to offer to attract the workers that I want?”
