2021 was the year of the “Great Resignation.” We have been told that it was a year when workers quit their jobs at historic rates. This is an economic trend meaning that employees voluntarily resign from their jobs. Blame has been aimed at the American government for failing to provide necessary worker protections in response to the COVID-19 pandemic. This led to wage stagnation. There was also a rising cost of living. The term was coined in May 2021 by Anthony Klotz, a professor of management at Texas A&M University.
It's now 2022 and unemployment rates have fallen sharply from their pandemic highs. The labor force participation rate - which is the percentage of people in the workforce, or looking for a job - has increased, though not to its pre-pandemic level.
It was thought in 2020 that 2021 with a vaccine would mark the renormalization of the economy, schools, and life in general. But Covid variants wiped out that vision.
It seems counterintuitive, but to economists quitting is usually an expression of optimism. You don't quit a job unless you have the prospect of another, probably better one, or you don't need to work because of a good financial situation. But the quits happened when inflation is looming, and the Omicron variant is dominating.
Some industries are seeing higher rates of quitting. It isn't surprising that leisure, hospitality, and retail are at the top. Those were hit hard by the pandemic. Healthcare is another and certainly many of those workers were just burned out by the pandemic. But the reasons given for quitting include a lack of adequate childcare and personal and family health concerns about Covid. If the pandemic overwhelmed you at your job, you might have decided to quit even without a new prospect in search of better work opportunities, self-employment, or, simply, higher pay.
Derek Thompson wrote in The Atlantic that there are 3 myths about this Great Resignation. One is that it is a new 2021 phenomenon. Is it really more of a cycle we have seen before or that has been moving into place for years and simply accelerated by the pandemic?
For colleges, it wasn't so much a Great Quit as it was a Great No-Show. The newest report I found from the National Student Clearinghouse Research Center (NSCRC) shows that postsecondary enrollment has now fallen 2.6% below last year’s level. Undergraduate enrollment has dropped 3.5% so far this fall, resulting in a total two-year decline of 7.8% since 2019. As with jobs, not all of that decline is because of the pandemic and it too is a trend that was evident before the pandemic. But Covid didn't help the decline.
Add to these one more "Great" that I see talked about - The Great Deflate. This is the idea that rather than our economy being a bubble that will burst, it's a balloon that is deflating. In "The Great Deflate" by M.G. Siegler, he talks about a more gradual trend. Picture that helium balloon floating at the ceiling on your birthday that day by day has been slowly moving down as it deflates. No burst, just a slow, steady fall.
Is there a connection among all these trends? Certainly, the connection is the economy. Perhaps, there won't be a stock market crash or something like the Dot Com bubble burst, but we see stock market drops of 1, 2 or 3% pretty regularly. Those are significant drops.
Since May 2021 when Anthony Klotz coined "The Great Resignation," other terms have emerged including “The Great Reimagination,” “The Great Reset” and “The Great Realization” terms that express the re-examining of work in our lives. But the quitting wave hasn't broken yet and so Klotz has more recently made three not-so-surprising predictions.
The Great Resignation will slow down
Flexible work arrangements will be the norm, not the exception
Remote jobs will become more competitive