By Ana Perez, 9th Grade
According to the U.S Labor Statistics, resignations peaked in April 2021 and have remained abnormally high, with a record-breaking 10.9 million jobs available at the end of July. Economists have called this phenomenon the “Great Resignation.” This is particularly common around the service industry, as nearly 7% of employees in the sector quit their jobs due to the several pandemic relief checks, student-loan forgiveness, and rent moratorium. It turns out that working in the service industry sucks. This has resulted in a labor shortage, since “people do not want to work anymore.”
Several people on the Internet have posted the reasons why they are quitting or boycotting their jobs. The main reason, at least in the United States, has been the low wages and lack of benefits. The current wages in these jobs are not enough to accommodate for taxes, rent, food, clothes, etc. And compared to other countries, the United States is lacking in wages. The average McDonald’s worker in Denmark earns $22/hr, 6 weeks of annual vacation, sick leave, a union, one year of paid family leave, life insurance, and a pension. On the other hand, the average McDonald’s worker in the United States gets $11 – 17/hr with no benefits.
During the Great Resignation, women have left the workforce at double the rate that men have. Why? According to Donegan M. (2021): “Women are forced to choose between jobs where they are paid too little, and childcare solutions that cost too much.” Most working mothers have to choose between their jobs or expensive daycare options, which were already costly before the pandemic – now, waiting lists can last for months. However, not all women leaving their jobs can be explained by costly childcare options. Some simply decided that leaving their jobs was more beneficial for them than staying.
Another reason why many workers are quitting has to do with the relationship between the workers and their bosses. A recent study by the Predictive Index revealed that out of 2K employees, 63% are thinking of leaving their jobs in 2022 due to their managers. A Udemy study in 2018 revealed that 50% of the surveyed employees had quit their jobs because of their managers and 66% believed that their managers lacked proper training. Many working adults have expressed their discontent with their managers on the Internet, stating that they are berated for not answering calls on their days off, suspended for discussing pay, not given sick leave, and expected to work during their holidays. At the end of the day, this is not helping employees stick around with their jobs in the post-COVID era.
And what is the Great Resignation leading to? Many businesses have closed or struggled to stay afloat since they have no employees. The immediate consequences it has on employment is that many are, obviously, going to be unemployed. This also cuts down GDP, as a 1% increase in unemployment decreases the GDP by 2%.
The Great Resignation can be somewhat compared to the fall of Feudalism when workers refused to work for pre-plague conditions. In comparison, workers are now resigning since most refuse to work for pre-pandemic conditions, leading many young Americans to despise capitalism. And if GDP growth reduces poverty, a decrease in GDP will increase poverty. However, the Great Resignation could alter the workforce dynamic in the United States – bringing back those workers.
“When we come into contact with life-threatening events, we tend to reflect on death and consider whether we are happy with our lives or whether we would like to make changes to them,” stated Anthony Klotz. Many have quit their jobs because they simply are not getting enough for what they are sacrificing. They are getting low pay and almost no benefits and for what? To deal with annoying and sometimes downright abusive customers and bosses? Employers are now scrambling to retain their employees using retention bonuses, allowing them to work from home and providing new benefits. Others are implementing policies to combat burnout, such as shortening the working week from five days to four.
The future of work (in the United States) relies on employers needing to realize the real reason for the Great Resignation. Workers want better pay and benefits. Compared to employers and companies in European countries such as Denmark and Germany, this is something the United States as a whole does not provide. When employers realize this, they are going to implement better wages, benefits, and work-life balance if they want to retain their employees. If not, they are not going to be able to turn a profit. After all, how are they going to be able to sell without anyone making the product?
- Who Is Driving the Great Resignation? (2021, November 10). Harvard Business Review. Retrieved November 23, 2021, from https://hbr.org/2021/09/who-is-driving-the-great-resignation
- Thompson, D. (2021, October 15). The Great Resignation Is Accelerating. The Atlantic. Retrieved November 23, 2021, from https://www.theatlantic.com/ideas/archive/2021/10/great-resignation-accelerating/620382/
- Bruening, M. (2021, September 27). McDonald’s Workers in Denmark Won Good Pay and Benefits Through Striking. Jacobin. Retrieved November 23, 2021, from https://www.jacobinmag.com/2021/09/denmark-mcdonalds-labor-unions-strikes-wages-benefits
- Lucas, A. (2021, May 13). McDonald’s raises hourly wages for company-owned restaurants. CNBC. Retrieved November 23, 2021, from https://www.cnbc.com/2021/05/13/mcdonalds-raises-hourly-wages-for-company-owned-restaurants.html
- Donegan, M. (2021, November 19). Part of the ‘great resignation’ is actually just mothers forced to leave their jobs. The Guardian. Retrieved November 23, 2021, from https://www.theguardian.com/commentisfree/2021/nov/19/great-resignation-mothers-forced-to-leave-jobs
- Schwantes, M. (2021, November 7). Why Are Workers Really Quitting? You Can Boil It Down to 1 Simple Reason. Inc.Com. Retrieved November 23, 2021, from https://www.inc.com/marcel-schwantes/why-are-workers-really-quitting-you-can-boil-it-down-to-1-simple-reason.html
- Fuhrmann, R. (2020, November 3). Unemployment and Economic Growth: Okun’s Law. Investopedia. Retrieved November 23, 2021, from https://www.investopedia.com/articles/economics/12/okuns-law.asp
- Fox, M. (2021, November 4). The ‘Great Resignation’ is altering the workforce dynamic — maybe for good. CNBC. Retrieved November 23, 2021, from https://www.cnbc.com/2021/11/01/great-resignation-may-be-altering-workforce-dynamic-for-good.html