This article is courtesy of Hannah Cox via Fee
If you don’t spend your days on TikTok or Reddit, you may be blissfully unaware of a growing movement urging people to quit their jobs en masse this fall. It’s called “The Great Resignation of 2021,” and for businesses already struggling to attract workers back to the office, it could spell very bad news. The social media trend coincides with broader disruptions in the labor market.
Monster, a global employment website, recently reported 95 percent of employees are considering changing jobs. This is on top of the 4 million people who already followed through and resigned in April. The country’s labor market is in a precarious position. The policies of the pandemic spurred the sharpest economic contraction in US history, millions lost their jobs and are still out of work, and yet businesses have been unable to fill their open positions.
The Great Resignation
On top of all this, reports indicate employers may soon face more disruption from what is being described as “the Great Resignation,” as millions of workers prepare to say, “I quit.” According to TikTok user @Katieyowyow, a recruiter with over 300,000 followers on the platform, as many as 1 in 4 employees are planning to leave their job this fall. These employees, she says, intend to spend the summer months using their vacation days and enjoying the benefits of full-time employment before they jump ship and turn in their notice in autumn.
Daniel Zhao, a labor economist with the employment website Glassdoor said, “We haven’t seen anything quite like the situation we have today.” Why is this happening? A multitude of reasons. Large numbers of Americans transitioned to working from home last year, and now that they’ve enjoyed the quality of life increase that remote work brings they are unwilling to return to the monotony of a desk job. Lots of managers have announced plans to bring employees back to the office this fall, and it seems many people are simply unwilling to do so. And given the plethora of open jobs at the moment, the best workers have their pick of employment.
Other workers used their downtime during the pandemic to develop new skills or passions, and now they want to find roles that allow them to incorporate those interests into their day-to-day lives. Some are seeking roles that require less of their time out of a desire to allocate more time to their families or children. And then there are those who simply just don’t want to work.
Jeremy Golembiewski is one example of a worker who has already taken the plunge. The 26-year veteran of the restaurant industry realized just how much of his children’s childhood he was missing while he was furloughed over the pandemic. He decided it was no longer acceptable to spend so much time away from them and quit his job in search of a more steady schedule and a 40-hour workweek.
Angel Perkins is another case in point. She resigned her role as a recruiter during the pandemic over health concerns, and in the meantime, she launched an online jewelry business. She quickly replaced her income and found the financial and time freedom her old work would not afford.
An Employee’s Market
The reality is it’s an employee’s market. There’s never been a better time to job hunt. The Labor Department recently reported 9.3 million job openings and there are hiring signs everywhere you look. Taking that into consideration, it makes sense that workers might be experiencing more freedom and confidence in the job market than usual—leading them to make bold career moves they would be less likely to take under other circumstances.
And there’s nothing wrong with that. Good employees should seek the greatest quality of life, highest pay, and the ability to spend their time on work they find meaningful. Those are strong incentives in a free market that encourage a good work ethic, innovation, and efficiency. What this means is that employers will have to compete with attractive incentives to earn the placement of the best employees, or even to fill openings in general.
Much of this can be seen in a favorable light. Competition is a good thing, and market incentives that encourage employers to offer better working arrangements create a better quality of life for all (and higher productivity in general).
Perverse Incentives
Unfortunately, though, trends like “The Great Resignation” are far from being fueled by market incentives and demands alone. Rather, they are the repercussion of bad, big-government policies that have severely tampered with the market for the past year.
The federal government has continued to send an increased amount of unemployment benefits to workers, even as the businesses they shut down struggle to open back up. Workers are responding to this perverse incentive in entirely predictable ways, choosing to stay home or work less—often for more pay than they were able to earn in the workforce—for an extended period of time.
Obviously, without the guarantee of a cushy taxpayer-funded unemployment payment, many of these employees would not have the luxury of simply quitting their jobs. They would have to increase their value if they wanted to demand new working arrangements on the market or build their way into new career paths while still holding down employment in the meantime.
The Stanford Encyclopedia of Philosophy paraphrased a quote of F.A. Hayek’s like this, “no one can decide that people won’t respond in predictable ways to perverse incentives unintentionally created by a central plan, in the same way, that no one can decide that insects will not become resistant to an insecticide.”
Central planners were warned that these kinds of problems would result from their policies, and yet they persisted anyway. As a result, it is likely we will all continue to see supply shortages and an increase in the price of goods and services.