It appears that American workers are, at long last, weighing in on the asymmetric relationship between labor and capital in this country. Nearly 3% of the American workforce quit their jobs in August, according to data released Tuesday by the U.S. Department of Labor.
The rise in the number of Americans abandoning their jobs can be attributed to two factors: the continued spread of the delta variant of the COVID-19 virus in August and its impact on employers, and the increasing opportunities available to workers for better pay and working conditions in other jobs.
As reported by Eli Rosenberg, writing for The Washington Post:
The number of people quitting their jobs has surged to record highs, pushed by a combination of factors that include Americans sensing ample opportunity and better pay elsewhere.
Some 4.3 million people quit jobs in August, according to the monthly survey — about 2.9 percent of the workforce, according to new data released Tuesday from the Department of Labor. Those numbers are up from the previous records set in April and nearly matched in July, of about 4 million people quitting.
As Rosenberg reports, this unprecedented exodus is occurring in retail and service industries, health care, and traditionally low-paying fields, as well as “professional business services,” which, roughly translated, means lesser-paying secretarial, “managerial,” and clerical occupations. More fulsomely interpreted, it includes significant numbers of folks whose low-paid labor previously allowed those in charge of such businesses to luxuriate in a secure and often bountiful wealth.
It appears that one small silver lining of the COVID-19 pandemic was the rare opportunity it provided for people to reflect on their current employers’ generosity … and weigh that generosity against their personal life situations. Now with businesses everywhere clamoring for employees—many boldly and loudly advertising their attractive hiring wages in the process—many American workers have adopted their own economic calculus, forsaking employers who continue to pay peasant wages for those who have sensibly concluded that their businesses’ future prospects demand they pay their workers better.
As reported by CBS News, The delta variant of the COVID-19 virus also appears to have influenced the departure of workers from those businesses where close customer contact is required, such as leisure and hospitality.
“The August JOLTS report shows employers and workers were anxious about the rising Delta COVID-19 wave two months ago,” Robert Frick, corporate economist at the Navy Federal Credit Union said in a note. “Workers quit, especially in retail, at a record rate to avoid exposure to possible infection. Job openings dropped, especially in leisure and hospitality, as travel dropped markedly due to Delta,” Frick said.
The Post’s Rosenberg quotes an economist at the Indeed job search hub, Nick Bunker, who emphasizes the newfound bargaining power of workers.
“This really elevated rate of people quitting their job is a sign that workers have lots of confidence and they have relatively stronger bargaining positions then they’ve had in the past,” Bunker said. “There’s lots of demand, and people are seizing that opportunity and quitting their job.
Before unemployment benefits for workers—provided by Democrats in their COVID-19 relief legislation—began to expire, Republican governors had eagerly and with stunning unanimity adopted a cynical and vicious strategy designed to force these same employees back into their low-paying positions, by cutting off benefits to their own state’s workers. This was done in response to howls of dismay by their donor base of corporate CEOs and business people, who saw their profit margins narrowing or disappearing altogether as the nation endured lockdowns and social distancing measures to contain the pandemic’s spread. Unsurprisingly, most of these Republican governors also adopted anti-masking policies, which virtually guaranteed the continued spread of the virus and its variants in their own states.
The result of this perverse Republican strategy of collective punishment of workers is now becoming apparent. As Rosenberg points out, “Republican officials in many states sought to address the issue by curtailing federal unemployment benefits this summer, but those cuts seem to have done little to resolve the issue.” Rather than being herded back into their dismal jobs, many workers may have instead elected to seek out safer or better paying new opportunities offered by more generous employers. Meanwhile, it doesn’t appear to have dawned on these same Republican governors that their strategy was inherently self-defeating, and could lead to the very results we see now. One thing seems fairly intuitive: This was probably not the result that those donors sought.
It is hardly surprising that workers have at long last chosen to quit their old jobs, rather than return to workplaces where their health and lives are at risk, particularly when new jobs beckon, with better pay and at least nominally safer conditions. Yet what’s particularly telling is that higher pay alone is not always a solution for many companies. There are signs that the pandemic has caused many workers to reevaluate their jobs in terms of pay and their quality of life. As Ian Thomas for CNBC reports, employers are finding out that further incentives, such as tuition reimbursement and other incentives, such as skills training, are needed to retain employees—another sign of workers’ newly increased leverage.
Just increasing pay alone won’t be enough for businesses to compete for workers in this challenging environment, according to a panel of senior HR executives who spoke during a CNBC Workforce Executive Council LinkedIn livestream that focused on recruiting, retaining and returning to the workplace.
“It’s a pretty dynamic time in the marketplace right now, and you’re seeing some pretty big trends and changes so you need to start with ensuring you are offering competitive wages,” said DJ Casto, executive vice president and chief human resources officer at Synchrony. “But you also have got to create the right kind of ecosystem to support your employees.”
Employers need to wrap around their heads the fact that there will be no return to “business as usual” after this pandemic. Hitting American workers over the head with a stick and providing crumbs as incentives won’t cut it anymore. Those companies and leaders who recognize that fact will be the ones who succeed and thrive in this environment.
Those who don’t will suffer the consequences. That’s just the law of the jungle.