By Alex Gryciuk
Starting after the initial beginning of the pandemic, former-employees around the country have quit their jobs at record high numbers. Leaving establishments empty and the economy vulnerable, job openings have skyrocketed since. This current phenomenon is called the “Great Resignation” where according to NBC, “Americans quit [their] jobs at a record pace during the second half of 2021” and well into the New Year. In fact, staggering numbers from the U.S. Bureau of Labor Statistics confirm that a record 4.5 million people left their jobs in November of 2021 alone. These devastating numbers, according to the New York Times, have resulted in steep declines of employment that are especially “concentrated in hospitality and other low-wage sectors, where intense competition for employees” is high.
Although there isn’t a one-reason-fits-all for quitting, there are still some major factors to why the “Great Resignation” occurred in 2021. They include increased competition from employers and inflation.
Increased competition from employers:
One of the leading causes for “Great Resignation” happening in 2021 and 2022 is job availability during the COVID-19 pandemic. At the beginning of the pandemic, millions of workers were laid or lost their job in an effort to uphold a “widespread commitment to public safety” during outbreaks and local mandates according to the Society of Human Resources Management. In fact, according to the Pew Research Center, about “25% of U.S. adults” themselves or someone in their household experienced getting “laid off or lost their job because of the coronavirus outbreak”. More shockingly, “15% saying this happened to them personally”. Overall, millions of Americans were left jobless. However, as restrictions loosened and more workers were able to come back to their jobs, many companies enticed much needed employees with higher pay and benefits. In particular, AP News explains that “Businesses…have been offering a $15 wage to try to fill enough jobs to meet surging demand from consumers” in 2021; much higher than the $7.25 national minimum wage. As more companies establish higher pay and benefits, many workers are leaving old jobs for better benefits in new ones. With an increase in competition from employers, workers had more opportunities for better employment; thus leading them to quit on a national level.
Another closely related reason for high resignation rates is inflation brought on by the pandemic. Supply chain blocks resulting in delayed trade, increased demand for goods, and soaring energy costs had sharply increased inflation in the United States and also increased the cost of living. As inflation rates rose to about 7% in December of 2021 according to Trading Economics however, the majority of employees that kept their jobs during the pandemic, also kept the same pay. According to the New York Times, “Only 17 percent of workers say they have received raises that kept up with inflation over the past year” while the rest state that they took pay cuts, no raises, or even delayed price increases that were not aligned to inflation rates. Bottom line, even if workers kept their jobs, they were forced to use up savings when inflation rates increased due to the pandemic. Therefore, when employers enticed new workers with better benefits, many laborers quit old jobs for compensation that accommodated inflation rates. The same New York Times article found that in a survey “respondents who reported voluntarily changing jobs during the pandemic were more likely to say their wages had kept up with inflation, and more likely to rate the economy highly overall”. Due to high inflation rates, a huge influx of ex-workers left old establishments for better jobs that better aligned with the economy.
In the end, “The Great Resignation” has marked a huge shift in employment patterns in the United States with record-high quit rates. But, there is still hope for the future and employment. Anthony Klotz, an organizational psychologist and professor at Texas A&M University mentioned in an NBC article, speculates that by the end of 2022, quit rates will slow down because employers will maintain better benefits and rights for its workers. He emphasizes that, “A silver lining of this horrible pandemic is that the world of work will take a huge positive step forward for worker”.