We are witnessing a curious phenomenon in the United States. Even as the country is swept away by omicron, an increasing number of employees are choosing to quit their jobs.
This great wave of resignations (“Big Quit” or “Great Resignation” in English) was initially attributed to the massive aid distributed to households during the pandemic, in particular exceptional unemployment benefits. But this arrangement ended in September, and resignations continue unabated. According to a Labor Department report released Tuesday, more than 4.5 million Americans quit their jobs in November alone! Never before has such a figure been recorded.
Hollywood cinema has made us familiar with sudden, and sometimes brutal, layoffs. At the start of the pandemic, some tech companies made a name for themselves by firing up to 30% of their employees remotely, through a simple videoconference. Today, it is voluntary departures that are exploding. How to explain this inversion of the balance of power?
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There are of course cyclical factors. In a context of economic recovery, it is common for employees to take advantage of the increase in activity to demand higher remuneration. However, the fastest way to increase your salary is often to change jobs. The incentives to take the plunge are all the stronger as the rise in prices today exceeds the rise in the average wage.
But this does not explain everything. Indeed, only a part of the American resigners return to work. In hotels, restaurants and other low-skilled services, companies are struggling to recruit, despite sectoral wage increases of more than 10%, more than double the rate of inflation. In total, the number of active people (at work or looking for a job) remains lower today than in 2019, before the crisis. Historical comparisons and between countries also reveal the unprecedented nature of the phenomenon. The number of voluntary departures was much lower during the previous recovery, after the 2008 crisis, and it is much lower today in France and in other European countries, which are nevertheless experiencing the same economic rebound as the United States. United.
Less hardship
To understand these mass withdrawals, we must therefore look to deeper causes. One of the main hypotheses is as follows: thanks to the pandemic and the upheavals it has introduced into everyday life, workers have taken a step back and reconsidered their way of life. Those among them who exercise the most arduous jobs prefer to quit their jobs. The older ones take early retirement, the younger ones go home to take care of their children and their elders. The departure of a colleague prompts those who remained to ask the question. In short, American employees are less and less tolerant of the harsh conditions offered to them: little paid leave, parental leave often non-existent, low subsidies for childcare. If there are fewer quits in Europe, it is because conditions are better there, and the lowest paid and least rewarding jobs have already been eradicated by a higher minimum wage: the sandwich men have since long disappeared from the streets of Paris but we still come across in Times Square.
Inflationary pressures
In the short term, the Great Resignation is to be expected to boost inflation. The reduction in the number of workers has the effect of reducing supply and, therefore, increasing prices. In addition, employers could further increase wages to convince their employees to stay or to attract replacements. If we could hope that current inflation will remain temporary, we can now fear that an inflationary spiral between prices and wages is setting in, forcing the central bank to raise its rates in the spring.
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In the longer term, it is perhaps a new model of society which is currently taking shape, where work would occupy a less important place. It was long thought that this model would impose itself in pain, as robotization and artificial intelligence replaced workers. For now, the Americans have taken the lead. “I quit!” replaced the famous “You’re fired!”.
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