Workers Make Gains as ‘Great Resignation’ Tightens Labor Markets
When the coronavirus pandemic hit New Orleans in March 2020, Jeremy Fogg, an executive pastry chef at a popular local restaurant, suddenly found himself without a job.
Fogg was far from alone. In the first few months of the crisis, approximately 22 million Americans lost their jobs, with millions more seeing their hours cut.
“For the first stretch of the pandemic, I just kind of sat at home and waited for my job to call and tell me we were reopening,” he said. “But as the months went by without a call, I worried I’d run out of money. I opened my own pop-up bakery and began teaching baking at a local college.”
The call to return to work eventually came. When it did, Fogg responded in a way he never would have expected at the onset of the pandemic.
“I told them I wasn’t coming back.”
Fogg’s decision underscores a larger trend in America over the past two years — one that many experts believe has shifted at least some of the power in the country’s labor market from employers to employees.
The phenomenon is called the “Great Resignation,” in which millions of workers chose not to return to the workforce or traditional positions after the sweeping job losses in the early months of the pandemic.
Many who did return to work have since left their jobs — 47 million U.S. workers quit in 2021. Nearly one in five nonretired adults left their job at some point that year, with the nation’s “quit rate” reaching a 20-year high in November, according to the Pew Research Center.
“I think a lot of us realized during the pandemic that we wanted something different than what we were settling for,” Fogg told VOA.
Some people he worked with before the pandemic left New Orleans to be closer to family. Others switched to careers less demanding than the service industry. Still others moved to service industry jobs with better pay or benefits. Fogg said he got a taste of the rewards of working for himself and didn’t want to go back.
“We realized we deserved better from our jobs, and it’s given us the courage to ask for what we think we deserve,” he said.
Tight labor market
Patrick Button, a professor of economics at Tulane University, said the recession caused by COVID-19 is unlike other recent recessions in the United States.
“Typically, recessions were an issue of demand. Employers weren’t interested in hiring, and people were shut out of the workforce,” Button told VOA. “What we’re experiencing now, however, is a supply-side issue. There is a demand for workers by employers, but workers aren’t eager to return.”
That has forced many employers to meet workers’ demands for better pay and benefits, Button explained.
“Employers are having a difficult time hiring workers, and when they do, they’re having a tough time getting them to stay,” he said. “In order to compete against other businesses for workers, many companies are raising wages and offering a better work environment.”
The trucking industry, for example, had struggled to retain drivers for years before the pandemic as the baby boomer generation retired from the workforce. This has caused supply chain issues across the country.
Sherri Brumbaugh, president and CEO of Garner Trucking Inc., said the driver shortage has become more challenging since the Great Resignation.
“It’s the most difficult hiring situation I’ve ever experienced,” she told VOA.
Older generations, Brumbaugh said, were more accepting of the hardships that come with “life on the road.” Younger drivers, however, have different expectations.
“They don’t want to be away from their families for a week at a time, and they don’t accept waiting for hours at truck stops because freight hasn’t arrived,” she said. “There was a time when maybe we didn’t have to. But now, if we’re going to attract new drivers, we have to adjust to what potential employees are looking for.”
Service industry struggles
Leisure and hospitality workers have reportedly left their jobs at more than twice the national average.
Those in the industry say this trend began pre-pandemic and is resulting in more options for employees.
“There are a lot more jobs out there, and quite frankly, the industry has been slow to respond,” said Jay Frisard, who was a regional manager overseeing multiple restaurants for 25 years before switching careers to the logistics industry during the pandemic.
“Wages are higher for service industry workers now, but it’s still often a life that sucks — long hours, constantly on your feet, angry customers. It’s not easy,” he said.
Eric Cook, who owns two restaurants in New Orleans, including the award-winning Gris-Gris, agrees that restaurant work can be grueling, which may be why he and his industry peers are having difficulties filling positions.
“I think when restaurants and bars were closed during the pandemic, a lot of workers explored other industries,” Cook said. “For me, cooking food is about sharing our culture, and that’s rewarding. But I think for a lot of people, if they found work in another industry, they saw that they can make money while sitting at home and without as much stress.”
To stay competitive, Cook raised salaries from $12 and $14 an hour to $22, and he’s offered more salaried positions. Even so, he hasn’t been able to hire enough staff to open his restaurants full time.
“People keep saying, ‘Pay more. Pay more!’ But I can’t go much further without losing money,” he said. “It’s not like I’m making money doing this as it is. People see a full restaurant and think it’s a gold mine, but with being closed during the pandemic, and now rising labor costs and through-the-roof inflation, figuring out how to make a profit at a restaurant is like trying to land on the fricking moon.”
Effects that last?
A survey from the Pew Research Center found that low pay, a lack of opportunities for advancement and feeling disrespected at work are the top reasons Americans quit their jobs last year.
“For the most part, those who quit their jobs are finding new ones easily,” Pew’s associate director of research, Juliana Horowitz, told VOA. “That gives people more courage to find something better.”
According to the survey, the decision to seek new work is paying off.
“The majority of respondents are earning more money, and they’re finding work with more advancement opportunities,” Horowitz said.
Some believe the effects of the Great Resignation are being overstated. A recent Harris Poll survey for USA Today said that one in five people who resigned during the pandemic regretted it.
Chris Smalls, a former Amazon warehouse worker who spearheaded the successful campaign to bring the first unionized workplace in the technology giant’s history, mocked the idea that the trend is harming employers.
“When you quit your job, guess what? They hire somebody else,” Smalls, now president and founder of the Amazon Labor Union, told NPR in an interview.
But while economists like Button note that much of the wage gains earned by workers have been offset by inflation, they believe at least some of the gains made by laborers in the past year are meaningful and will be permanent.
“Of course, not everything we’ve seen will linger,” he said. “But employers are seeing that things like the ability to work from home, flexible hours and benefits such as sick pay are important. And I think those changes will stay to some degree.”
Whether it’s stronger unions, leaving a job for a better opportunity, or in his case, starting his own business, Fogg believes the Great Resignation has helped empower many workers to evaluate what they want out of a job.
“There’s nothing wrong with standing up for yourself and not accepting less than you deserve,” he said. “I think a lot of us are finally realizing that.”