Sunday, October 17, 2021

The Revolt of the American Worker

Among the surprises in recent jobs reports is the fact that workers are quiting their jobs in record numbers.  As a piece in The Atlantic notes,  "Nearly 7 percent of employees in the “accommodations and food services” sector left their job in August."  And the motivation is not because workers can do better on unemployment (typically, quitting your job makes one inelegible for unemployment).  There are various theories for the phenomenon. one of which is, as noted in a New York Times column is that the pandemic has made many reevaluate their lives and jobs.  America is NOT a worker friendly nation:

For America is a rich country that treats many of its workers remarkably badly. Wages are often low; adjusted for inflation, the typical male worker earned virtually no more in 2019 than his counterpart did 40 years earlier. Hours are long: America is a “no-vacation nation,” offering far less time off than other advanced countries.

Add to this the lack of respect many workers receive from customers - wait staff in restaurants being one such category - and many have opted for career changes, early retirement if feasible, or finding more supportive employers. For decades too many businesses have given lip service to "our emplyees are our most important asset" while treating their employees like dirt (I have been in law firms where attorneys being nice to paralegals and secretaries was frowned upon) and in some cases refusing to pay them a living wage.  Perhaps the current worker revolt will usher in some much needed change in how workers are paid and treated.  First these highlights from the piece in The Atlantic:

In April, the number of workers who quit their job in a single month broke an all-time U.S. record. Economists called it the “Great Resignation.” But America’s quittin’ spirit was just getting started. In July, even more people left their job. In August, quitters set yet another record. That Great Resignation? It just keeps getting greater.

“Quits,” as the Bureau of Labor Statistics calls them, are rising in almost every industry. For those in leisure and hospitality, especially, the workplace must feel like one giant revolving door. Nearly 7 percent of employees in the “accommodations and food services” sector left their job in August.

[Q]uitting is a concept typically associated with losers and loafers. But this level of quitting is really an expression of optimism that says, We can do better. You may have heard the story that in the golden age of American labor, 20th-century workers stayed in one job for 40 years and retired with a gold watch. But that’s a total myth. 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. 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. The Great Resignation is, literally, great.

Leisure and hospitality workers might be saying “to hell with this” on account of Americans deciding to behave like a pack of escaped zoo animals. Call it the Great Rudeness. Airlines in the United States reported that, by June 2021, the number of unruly passengers had already broken records—doubling the previous all-time pace of orneriness.

Meanwhile, the basic terms of employment are undergoing a Great Reset. . . . In fact, the share of Americans who say they plan to work beyond the age of 62 has fallen to its lowest number since the Federal Reserve Bank of New York started asking the question, in 2014. Workism isn’t going away; for many, remote work will collapse the boundary between work and life that was once delineated by the daily commute. But this is a time of broad reconsideration. . . . . we may instead look back to the pandemic as a crucial inflection point in something more fundamental: Americans’ attitudes toward work. Since early last year, many workers have had to reconsider the boundaries between boss and worker, family time and work time, home and office.

The Times column picks up on the possible motivations for this phenomon and the supply-chain issues currently hitting the economy as well.  Here are excerpts:

In 2021, . . . . many of our problems seem to be about inadequate supply. Goods can’t reach consumers because ports are clogged; a shortage of semiconductor chips has crimped auto production; many employers report that they’re having a hard time finding workers.

Much of this is probably transitory, although supply-chain disruptions will clearly last for a while. But something more fundamental and lasting may be happening in the labor market. Long-suffering American workers, who have been underpaid and overworked for years, may have hit their breaking point.

About those supply-chain issues: It’s important to realize that more goods are reaching Americans than ever before. The problem is that despite increased deliveries, the system isn’t managing to keep up with extraordinary demand.

Earlier in the pandemic, people compensated for the loss of many services by buying stuff instead. People who couldn’t eat out remodeled their kitchens. People who couldn’t go to gyms bought home exercise equipment.

The result was an astonishing surge in purchases of everything from household appliances to consumer electronics. Early this year real spending on durable goods was more than 30 percent above prepandemic levels, and it’s still very high. But things will improve.

The labor situation, by contrast, looks like a genuine reduction in supply. Total employment is still five million below its prepandemic peak. Employment in the leisure and hospitality sector is still down more than 9 percent. Yet everything we see suggests a very tight labor market.

On one side, workers are quitting their jobs at unprecedented rates, a sign that they’re confident about finding new jobs. On the other side, employers aren’t just whining about labor shortages, they’re trying to attract workers with pay increases. Over the past six months wages of leisure and hospitality workers have risen at an annual rate of 18 percent, and they are now well above their prepandemic trend.

[W]hy are we experiencing what many are calling the Great Resignation, with so many workers either quitting or demanding higher pay and better working conditions to stay? Until recently conservatives blamed expanded jobless benefits, claiming that these benefits were reducing the incentive to accept jobs. But states that canceled those benefits early saw no increase in employment compared with those that didn’t, and the nationwide end of enhanced benefits last month doesn’t seem to have made much difference to the job situation.

What seems to be happening instead is that the pandemic led many U.S. workers to rethink their lives and ask whether it was worth staying in the lousy jobs too many of them had.

The harder question is, why now? Many Americans hated their jobs two years ago, but they didn’t act on those feelings as much as they are now. What changed?

Well, it’s only speculation, but it seems quite possible that the pandemic, by upending many Americans’ lives, also caused some of them to reconsider their life choices. Not everyone can afford to quit a hated job, but a significant number of workers seem ready to accept the risk of trying something different — retiring earlier despite the monetary cost, looking for a less unpleasant job in a different industry, and so on.

And while this new choosiness by workers who feel empowered is making consumers’ and business owners’ lives more difficult, let’s be clear: Overall, it’s a good thing. American workers are insisting on a better deal, and it’s in the nation’s interest that they get it.

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