Mystery of the ‘Great Resignation’ by Millions of Americans
Published in France 24
(France) on 15 October 2021
by Sébastien Seibt (link to original)
(France) on 15 October 2021
by Sébastien Seibt (link to original)
Translated from
by Amelie Filliatre.
Edited by Helaine Schweitzer.
More than 4.3 million Americans resigned from their jobs in August, according to data released last Wednesday by the Labor Department. This phenomenon is gaining so much momentum in the U.S. that it is starting to have visible repercussions on the country's economy.
Americans call it the "Big Quit" or the "Great Resignation." They are referring to the wave of American employees leaving their jobs in droves. More than 4.3 million of them handed in their resignations in August, according to the latest statistics from the Labor Department, published Oct 13.
This has been unheard of since 2000, the year the U.S. began recording monthly resignation statistics. "This number indicates that more than 3% of all private-sector employees have left their jobs, which is more than the previously established record in January 2001 (2.8%), while the economic context was still favorable," explains Christophe Blot, an expert in U.S. economics at the French Economic Observatory, when contacted by France 24.
A Woman Over 35 Living in the Midwest
And the current phenomenon is not limited to a single month: 20 million employees have left their jobs since last spring, according to the American media. "But there has been a notable increase over the last three months," notes Blot.
The scope of the development is so great that it is no longer discussed solely among economists in academic circles. The "Big Quit" has been the subject of debates on the morning shows of American cable networks, and Trevor Noah dedicated one episode of his very popular "Daily Show" to the phenomenon on Oct 14.
The wave of resignations does not affect everyone in the same way. Almost 40% of employees who have walked away from their jobs were in the retail, hospitality and food service sectors, as well as in health care services, according to the Labor Department.
The typical resignee last August was a woman 35 or older, living in the Midwest. Indeed, 5.5% of female employees of small and medium-sized companies have quit their jobs, compared to "only" 4.4% of their male colleagues, according to an analysis by Gusto, a company providing services to businesses. The number of resignations jumped by more than 20% among employees nearing the age of 40 and is almost twice as high in the central states than in the coastal states, a Harvard Business Review study revealed.
The Labor Department merely published those numbers without any additional explanation. This gives free rein to economists and commentators who have, over the last few days, provided many theories while admitting that "it is still a little early to draw definitive conclusions about the reasons behind the phenomenon," Blot highlighted.
An Uprising by Poorly Paid and Poorly Regarded Employees?
It may illustrate, above all else, the dissatisfaction of employees working in the sectors that took the worst hit or were the people most called upon during the health crisis. It is not by chance that grocery store cashiers, nurses, hotel cleaners and other employees in low-skilled, low-wage jobs are most represented among those who resigned, notes the Wall Street Journal. "Now that the economic recovery is here, those workers realize there is no reason to continue being underpaid, after having been put under pressure for almost a year, when there are more and more opportunities to find a new job," the well-known East Coast daily asserted.*
On social media and community websites such as Reddit, posts from Americans celebrating their resignation as a protest against lamentable working conditions have increased over the last weeks. A video posted at the end of August by a Walmart employee who filmed herself announcing her resignation to the entire store was a hit on TikTok, where it gathered millions of views.
A note released by Goldman Sachs suggests that financial aids put in place by the American government to guarantee minimum living wages during the pandemic made the idea of resigning less scary for a part of the workforce. But this analysis, which places the blame for the current wave of resignations on the government, was disputed by other economists who point out that in August, a large part of those public benefits was lowered or canceled altogether … which did not stop Americans from walking out on their jobs, notes The Washington Post.
Remote working, which gained traction during the pandemic, has also affected the landscape of the job market. "Skilled workers from the more agricultural regions of the Midwest have been less hesitant to resign because they have realized that they could apply for jobs all over the country without having to move," points out the study quoted by the Harvard Business Review.*
Some economists have even managed to link the boom of the stock exchange since the beginning of the pandemic to the "Great Resignation." "Baby boomers have seen their portfolios gain so much value during the health crisis that they have been able to go into early retirement," assured the Wall Street Journal.*
Some have even suggested the existence of chain reactions, with resignations causing more resignations. This is allegedly the case in the child care sector: with the shortage of workers, it is more and more difficult to find spots in childcare facilities. Encouraged by the savings they were able to make during the lockdown period — the savings of Americans have increased by over 4,000 billion during the health crisis — some parents have decided that one of them could afford to resign to take care of their child, observed The Washington Post, which spoke to several of those young parents.
More Money Is No Longer Enough
This "Big Quit" is starting to have repercussions for the entire American economy. There are currently almost 11 million unfilled job openings. This number is also unheard of since the millennium began, the Associated Press has noted.
"The great question is whether this trend of a job market offering multiple opportunities will become established over the long term, which could bring the American economy close to the full employment context of the 1970s, when workers had an abundance of jobs to choose from, something that would allow for wages to be reviewed upward," Blot said.
Several big chains, such as CVS, Costco and Walgreens, have already started to increase the minimum wage to $15 an hour. But this is not always enough. Another lesson from this wave of resignations is that "salary alone is no longer the sole motivation. It is generally better working conditions which workers are seeking," the economist noted.
Good health insurance, for instance, is often the No. 1 priority for people seeking a new job. The health crisis has demonstrated how important access to affordable health care can be. In the U.S., health insurance companies are generally chosen by employers for their workers.
But not all employers are ready to bend over backward to attract employees, and they are trying to find other ways to make up for the lack of personnel. In the hospitality industry, for instance, several chains interviewed by the Wall Street Journal reveal that they decided to save on certain services: they offer fewer breakfast choices, the rooms are cleaned less often and electronic terminals are replacing check-in receptionists. Bar owners are also trying to replace the waiting staff with tablets that customers use to place orders.
This will most likely be one of the important battlegrounds for the U.S. as it emerges from the crisis: Will it lead to an improvement of working conditions, or, as Noah said, are customers soon going to have to cook their own food at restaurants?
*Editor’s Note: This quotation, although accurately translated, could not be independently verified.
Americans call it the "Big Quit" or the "Great Resignation." They are referring to the wave of American employees leaving their jobs in droves. More than 4.3 million of them handed in their resignations in August, according to the latest statistics from the Labor Department, published Oct 13.
This has been unheard of since 2000, the year the U.S. began recording monthly resignation statistics. "This number indicates that more than 3% of all private-sector employees have left their jobs, which is more than the previously established record in January 2001 (2.8%), while the economic context was still favorable," explains Christophe Blot, an expert in U.S. economics at the French Economic Observatory, when contacted by France 24.
A Woman Over 35 Living in the Midwest
And the current phenomenon is not limited to a single month: 20 million employees have left their jobs since last spring, according to the American media. "But there has been a notable increase over the last three months," notes Blot.
The scope of the development is so great that it is no longer discussed solely among economists in academic circles. The "Big Quit" has been the subject of debates on the morning shows of American cable networks, and Trevor Noah dedicated one episode of his very popular "Daily Show" to the phenomenon on Oct 14.
The wave of resignations does not affect everyone in the same way. Almost 40% of employees who have walked away from their jobs were in the retail, hospitality and food service sectors, as well as in health care services, according to the Labor Department.
The typical resignee last August was a woman 35 or older, living in the Midwest. Indeed, 5.5% of female employees of small and medium-sized companies have quit their jobs, compared to "only" 4.4% of their male colleagues, according to an analysis by Gusto, a company providing services to businesses. The number of resignations jumped by more than 20% among employees nearing the age of 40 and is almost twice as high in the central states than in the coastal states, a Harvard Business Review study revealed.
The Labor Department merely published those numbers without any additional explanation. This gives free rein to economists and commentators who have, over the last few days, provided many theories while admitting that "it is still a little early to draw definitive conclusions about the reasons behind the phenomenon," Blot highlighted.
An Uprising by Poorly Paid and Poorly Regarded Employees?
It may illustrate, above all else, the dissatisfaction of employees working in the sectors that took the worst hit or were the people most called upon during the health crisis. It is not by chance that grocery store cashiers, nurses, hotel cleaners and other employees in low-skilled, low-wage jobs are most represented among those who resigned, notes the Wall Street Journal. "Now that the economic recovery is here, those workers realize there is no reason to continue being underpaid, after having been put under pressure for almost a year, when there are more and more opportunities to find a new job," the well-known East Coast daily asserted.*
On social media and community websites such as Reddit, posts from Americans celebrating their resignation as a protest against lamentable working conditions have increased over the last weeks. A video posted at the end of August by a Walmart employee who filmed herself announcing her resignation to the entire store was a hit on TikTok, where it gathered millions of views.
A note released by Goldman Sachs suggests that financial aids put in place by the American government to guarantee minimum living wages during the pandemic made the idea of resigning less scary for a part of the workforce. But this analysis, which places the blame for the current wave of resignations on the government, was disputed by other economists who point out that in August, a large part of those public benefits was lowered or canceled altogether … which did not stop Americans from walking out on their jobs, notes The Washington Post.
Remote working, which gained traction during the pandemic, has also affected the landscape of the job market. "Skilled workers from the more agricultural regions of the Midwest have been less hesitant to resign because they have realized that they could apply for jobs all over the country without having to move," points out the study quoted by the Harvard Business Review.*
Some economists have even managed to link the boom of the stock exchange since the beginning of the pandemic to the "Great Resignation." "Baby boomers have seen their portfolios gain so much value during the health crisis that they have been able to go into early retirement," assured the Wall Street Journal.*
Some have even suggested the existence of chain reactions, with resignations causing more resignations. This is allegedly the case in the child care sector: with the shortage of workers, it is more and more difficult to find spots in childcare facilities. Encouraged by the savings they were able to make during the lockdown period — the savings of Americans have increased by over 4,000 billion during the health crisis — some parents have decided that one of them could afford to resign to take care of their child, observed The Washington Post, which spoke to several of those young parents.
More Money Is No Longer Enough
This "Big Quit" is starting to have repercussions for the entire American economy. There are currently almost 11 million unfilled job openings. This number is also unheard of since the millennium began, the Associated Press has noted.
"The great question is whether this trend of a job market offering multiple opportunities will become established over the long term, which could bring the American economy close to the full employment context of the 1970s, when workers had an abundance of jobs to choose from, something that would allow for wages to be reviewed upward," Blot said.
Several big chains, such as CVS, Costco and Walgreens, have already started to increase the minimum wage to $15 an hour. But this is not always enough. Another lesson from this wave of resignations is that "salary alone is no longer the sole motivation. It is generally better working conditions which workers are seeking," the economist noted.
Good health insurance, for instance, is often the No. 1 priority for people seeking a new job. The health crisis has demonstrated how important access to affordable health care can be. In the U.S., health insurance companies are generally chosen by employers for their workers.
But not all employers are ready to bend over backward to attract employees, and they are trying to find other ways to make up for the lack of personnel. In the hospitality industry, for instance, several chains interviewed by the Wall Street Journal reveal that they decided to save on certain services: they offer fewer breakfast choices, the rooms are cleaned less often and electronic terminals are replacing check-in receptionists. Bar owners are also trying to replace the waiting staff with tablets that customers use to place orders.
This will most likely be one of the important battlegrounds for the U.S. as it emerges from the crisis: Will it lead to an improvement of working conditions, or, as Noah said, are customers soon going to have to cook their own food at restaurants?
*Editor’s Note: This quotation, although accurately translated, could not be independently verified.
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