Are Workers Gaining the Upper Hand?
The previous post on Fifty Year Perspective, recounted many of the causes of the slow recovery in employment following Covid-19. Closed schools, lack of child daycare and elder care, generous unemployment benefits, repeated spikes in infection rates, and doubts concerning the effectiveness of vaccines extended the recovery.
Even though nearly six million workers remain unemployed and the labor force counts over three million fewer workers than the early-2020 start of the pandemic, millions of workers are resigning their jobs. News media have named the phenomenon The Great Resignation. Why are millions of workers resigning month after month, and how can they afford to remain or become unemployed?
Much is made of the August employment report of 8.4 million unemployed workers, while employers are trying to fill 10.4 million open jobs. In fact, this mismatch goes a long way toward explaining mass resignations. Millions of workers unhappy with their current employment see opportunity for better positions or pay or improved work/life balance in all those job openings.
An elevated level of resignations has historically been an expression of worker confidence in finding employment elsewhere. Tracked since December 2000, resignations had been as high as 3.6 million before the pandemic. Swelling to 4.2 million in August 2021, numbers were highly concentrated in public-facing industries – food service, accommodations and retail accounted for half of resignations. In these and other industries, health concerns and child care issues unique to the Covid-19 pandemic added to the total.
A number of situations are encouraging workers to resign, especially workers in low-paying jobs with irregular or limited hours. Undoubtedly the extra unemployment benefits created a cushion allowing time to consider alternatives. News stories of major national employers raising their minimum wage to $15 or $18 per hour attracted workers earning well less than that. The number of multiple-job holders has fallen by over a million since January 2020, as workers holding two or more jobs could afford to leave one.
Being able to work at home during the pandemic provided flexibility workers do not want to give up. Some employed workers not looking to change jobs received unsolicited calls from recruiters offering work-from-home positions. Workers experiencing burnout or reconsidering the trajectories of their careers took the opportunity to explore new opportunities or new careers. For older workers nearing retirement, two million made the decision that they could comfortably leave the labor force for good.
Declines in the working-age population foretold labor shortages before there was a pandemic. So if workers are taking advantage of the pandemic to move up to more desirable jobs, who is going to fill these “undesirable” jobs going forward? Technology seeks to fill the void with a variety of robots, not just for manufacturing, but service robots.
Fortunately, some of the service industries for which robots are being developed are the same industries experiencing hiring difficulty. Among them are health care, food preparation, customer service, and hospitality. Even in the professional service industry, robots are being used for inspection, maintenance and disaster response tasks to relieve human workers of dangerous tasks.
For now workers have a favorable environment for finding more satisfying jobs, amid signals that the pandemic’s “essential workers” will benefit from rising pay. And for the future there may be fewer unpleasant jobs.
Investment in robotics has been significantly higher in countries that are undergoing more rapid aging. A report by the National Bureau of Economic Research documented a higher concentration of robots in Japan and Germany, both countries with lower proportions of population ages 26 to 55.