Tens of millions of Americans have changed jobs over the past two years, a tidal wave of resignation that has reflected — and helped create — a rare moment of worker power in which employees demanded higher wages and, as understaffed employers, often gave it to themselves. .
But the “Great Resignation,” as it came to be known, appears to be coming to an end. The rate of workers voluntarily quitting their jobs has dropped sharply in recent months — though Rose in May — and it’s slightly higher than it was before the pandemic disrupted the US labor market. In some industries with higher turnover, such as hospitality and retail, quitting has fallen back to pre-pandemic levels.
The question now is whether the gains made by workers during the great layoffs will stick more than they do now — or whether employers will regain their leverage, particularly if, as many forecasters expect, the economy slips into recession at some point in the year. next.
Already, the pendulum may swing back toward employers. Wage growth slowed, particularly in low-paying service jobs as it rose as turnover peaked in late 2021 and early 2022. Employers, though still complaining about labor shortages, reported that it was becoming easier to hire and retain workers. And those who change jobs are no longer receiving the huge raises that have become the norm in recent years, according to data from payroll processing company ADP.
“You no longer see the signs stating a $1,000 signing bonus,” said Nella Richardson, chief economist at ADP.
Ms. Richardson compared the job market to a game of musical chairs: When the economy began to recover from the pandemic lockdown, workers were able to move between jobs freely. But with warnings of a recession in the air, they’re worried about being stuck without a job when they’re outnumbered.
“Everyone knows the music is about to stop,” said Ms. Richardson. “This will lead people to stay a little bit longer.”
Aubrey Moya joined The Great Quit about a year and a half ago, when she decided she had enough of the low wages and hard work of waiting tables. Her husband, a welder, was making good money – he’d also changed jobs in search of a better pay – and they decided it was time to start the photography business they had always dreamed of. Ms. Moya, 38, became one of millions of Americans to start a small business during the pandemic.
Today, though, Ms. Moya wonders if her dream is sustainable. Her husband makes less money, and the cost of living has gone up. Her clients, affected by hypertrophy, are not thrilled by the photo shoots she specializes in. She is nervous about making payments on her Fort Worth studio.
“There was a moment of empowerment,” she said. “There was a ‘we’re not going back, we’re not going to take this anymore’ moment, but the truth is yeah, we are, because how are we going to pay the bills otherwise?”
But Ms. Moya won’t be back at the waiting tables just yet. Some economists believe that workers are likely to hold on to some of the gains they have made in recent years.
“There are good reasons to believe that at least a significant portion of the changes we have seen in the lower-wage labor market will prove permanent,” said Arindrajit Dube, a University of Massachusetts professor who has studied pandemic economics.
Major quitting has often been portrayed as a phenomenon where people stop working altogether, but the data tells a different story. Most of them quit to take other, usually better paying jobs – or, like Ms. Moya, to start their own businesses. And while turnover increased in almost all industries, it was concentrated in low-paid services, where workers in general had little influence.
For these workers, the rapid reopening of the personal economy in 2021 has presented a rare opportunity: Restaurants, hotels and stores needed tens of thousands of staff when many people were still avoiding jobs that required face-to-face interaction with the public. Even as concerns about the coronavirus faded, demand for workers continued to outpace supply, in part because many people who had left the service industry weren’t eager to return.
The result was an increase in the wages of workers at the bottom of the income scale. Average hourly earnings for restaurant and hotel workers increased 28 percent from the end of 2020 to the end of 2022, far outpacing inflation and overall wage growth.
in The last paperMr. Doby and two co-authors have found that the earnings gap between workers at the top of the income ladder and those at the bottom, after having widened for four decades, is beginning to narrow: in just two years, the economy has reversed nearly a quarter of the increase in inequality since 1980. They found that much of this progress came from workers’ increased ability—and willingness—to change jobs.
Wages no longer rise faster for low-wage workers than for other groups. But more importantly, in Mr. Dobby’s view, the lower-wage workers have not lost their gains over the past two years, keeping wage gains keeping pace with inflation and higher wages. This suggests that turnover may decrease not only because workers have become more wary but also because employers have had to raise wages and improve conditions enough that their workers are not desperate to leave.
Danny Crone, a restaurant server in Los Angeles, has changed jobs twice since returning to work after pandemic restrictions were lifted. At first, he went to work at a dive bar, where his hours were “rough” and the most lucrative shifts were reserved for servers selling margaritas. He quit to work at a large restaurant chain, which offered better hours but little scheduling flexibility—a problem for Mr. Kron, an aspiring actor.
So last year, Mr. Kron, 28, quit again, to work at Blue Ribbon, an upscale sushi restaurant, where he makes more money and is better suited to his acting schedule. He said the strong post-pandemic job market gave him the confidence to keep changing jobs until he finds one that works for him.
“I knew there were a plethora of other positions to be filled, so I felt less attached to any one job out of necessity,” Mr. Kron wrote in an email.
But now that he has a job he loves, he doesn’t feel the urgency to keep looking — partly because he feels the job market has thinned, but mostly because he’s happy where he is, he said.
“Looking for a new job is a lot of work, and training for a new job is a lot of work,” he said. “So when you find a good service job, you’re not going to give it up.”
The job market remains strong, with an unemployment rate below 4 per cent and job growth continuing, albeit at a slower rate than in 2021 or 2022. But even optimists like Mr. Doby concede that workers like Mr. Krohn could lose leverage if companies start cutting jobs collectively.
“The situation is very fragile,” said Katherine Ann Edwards, a labor economist and policy advisor. He studied the role of smoking cessation in wage growth. She said the recession could wipe out the gains that hourly workers have made over the past few years.
However, some workers say one thing has changed in a more permanent way: their behavior. After praising “essential workers” early in the pandemic — and giving them bonuses, paid sick time and other perks — many workers in hospitality, retail and similar jobs say they were disappointed to see companies roll back benefits as the emergency subsided. Partly, they say, the big resignation was a reaction to that experience: They were no longer willing to work for companies that didn’t value them.
Amanda Schiller, who runs a store near Hickory, N.C., said her boss recently told her she needed to find more ways to accommodate hourly workers because they were leaving to work elsewhere. Her response: “So do I.”
“If I don’t feel supported and I don’t feel like you take my concerns seriously and you guys keep giving up more and more for me, I could do the same,” said the lady. Schiller, 40, said. “You no longer have loyalty to a corporation, because corporations have no loyalty to you.”
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