The ‘Great Resignation’ goes global
In the United States, the phenomenon dubbed as the “Great Resignation” seems to be picking up speed. A record 4.3 million U.S. workers quit their jobs in August, according to new data from the Labor Department — a figure that expands to 20 million if measured back to April. Many of these resignations took place in the retail and hospitality sectors, with employees opting out of difficult, low-wage jobs. But the quitting spans a broad spectrum of the American workforce, as the toll of the pandemic — and the tortuous path to recovery — keeps fueling what Atlantic writer Derek Thompson has described as “a centrifugal moment in American economic history.”
Wages are up and businesses face staffing shortages, while the experience of a sustained public health emergency has prompted myriad Americans to reevaluate their work options.
“This [pandemic] has been going on for so long, it’s affecting people mentally, physically,” Danny Nelms, president of the Work Institute, a consulting firm, told the Wall Street Journal. “All those things are continuing to make people be reflective of their life and career and their jobs. Add to that over 10 million openings, and if I want to go do something different, it’s not terribly hard to do.”
The “Great Resignation” in the United States was preceded by a far greater — decades-long, arguably — stagnation in worker wages and benefits. In lower-end jobs, earnings have not matched the pace of inflation, while work grew more informal and precarious. Workers’ rights activists now see a vital moment for a course correction. October has been a banner month for American organized labor, with major strikes across various industries sweeping the country.
“Workers are harder to replace and many companies are scrambling to manage hobbled supply chains and meet pandemic-fueled demand for their products. That has given unions new leverage, and made striking less risky,” my colleagues reported.
For the average worker in a developed Western economy, there are reasons for encouragement. “The truth is people in the 1960s and ’70s quit their jobs more often than they have in the past 20 years, and the economy was better off for it,” wrote Thompson in the Atlantic. “Since the 1980s, Americans have quit less, and many have clung to crappy jobs for fear that the safety net wouldn’t support them while they looked for a new one. But Americans seem to be done with sticking it out. And they’re being rewarded for their lack of patience: Wages for low-income workers are rising at their fastest rate since the Great Recession.”
In social democratic Western Europe, a stronger safety net has led to somewhat less disruption in the workforce. But similar trends are at play: “Data collated by the OECD, which groups most of the advanced industrial democracies, shows that in its 38 member countries, about 20 million fewer people are in work than before the coronavirus struck,” noted Politico Europe. “Of these, 14 million have exited the labor market and are classified as ‘not working’ and ‘not looking for work.’ Compared to 2019, 3 million more young people are not in employment, education or training.”
A survey published in August found that a third of all Germany companies were reporting a dearth in skilled workers. That month, Detlef Scheele, head of the German Federal Employment Agency, told Süddeutsche Zeitung newspaper that the country would need to import 400,000 skilled workers a year to make up for shortfalls in a host of industries, from nursing care to green tech companies. Pandemic-era border closures and rising wages in Central and Eastern European countries have led to shortages of meatpackers and hospitality workers in countries like Germany and Denmark.
“Frankly, this is a pay issue,” said Andrew Watt, head of the European economics unit at the Macroeconomic Policy Institute at the German trade unions’ Hans Böckler Foundation, to Politico. “Wages will have to increase in these sectors to get people back into tough, low-paid jobs. That’s no bad thing.”
But the story gets a bit more uneven, and certainly more grim, in the developing world. In Latin America and the Caribbean, 26 million people lost their jobs last year amid pandemic-era shutdowns, according to the U.N.'s International Labour Organization. The vast majority of jobs that have returned are in the informal sector, an outcome that often means even lower pay and greater precarity in a region already defined by profound economic inequality.
“These are jobs that are generally unstable, with low wages, without social protection or rights,” said Vinícius Pinheiro, regional director for the ILO, at a briefing last month. He also noted the disproportionate impact of the pandemic on the region’s youth. According to one study earlier this year, 1 in 6 people aged between 18 and 29 in Latin America and the Caribbean had left work since the pandemic began.
In Asia’s diverse economies, other pains are being felt. China is seeing its own version of the “Great Resignation,” with a younger generation of workers more disenchanted by their prospects and turned off by the relatively low wages in the manufacturing centers that powered China’s economic rise. Authorities in Beijing warn of a growing shortage of skilled workers in its crucial tech industry, a challenge for China’s leadership as it tries to steer the national economy toward more skilled sectors. And as global demand picks up after the fallow months of the pandemic, China’s factories are feeling the pinch of labor shortages.
Another labor-related pandemic phenomenon is crystallizing in neighboring Vietnam: Many migrant workers who left for their rural homes when jobs in big cities dried up amid lockdowns are not coming back.
“It’s clear that there was extreme hardship faced by both businesses and workers during the prolonged lockdown,” said Mary Tarnowka, executive director of AmCham Vietnam in Ho Chi Minh City, to the Financial Times. “And there was particular pain and hardship for people at lower income levels who didn’t have money for rent or food.”
In their villages, many of Asia’s working poor can at least count on roofs over their head and food to eat. It’s another form of resignation. Those who clung to what jobs they could keep were often coping with more dire conditions. When the pandemic snarled fast-fashion supply chains, millions of garment workers in South Asia, as a recent study by the Asia Floor Wage Alliance documented, had to swallow wage losses and endure work arrangements marked by widespread human rights abuses.
In a survey interviewing 1,140 garment workers in Myanmar, Honduras, Ethiopia and India, researchers from Britain’s University of Sheffield and the U.S.-based Worker Rights Consortium found that a majority had been forced to borrow money and many incurred greater debt over the course of the pandemic. About a third of workers who changed jobs reported worse working conditions, including lower pay and more risk.
“Workers were already not being paid fair wages and had little savings at the beginning of the pandemic,” said Zameer Awan, field worker with the Pakistan Institute of Labour Education and Research, to Reuters. “Now most are deep in debt and those who have found jobs again find themselves in more abusive conditions but without a voice anymore.”