The Great Power Shift

I wrote recently about The Great Resignation, or what I called The Big Quit. More than half of survey workers say they’re planning to leave their jobs over the next year. According to a recent article, some of the resignations will be values-based. “For some workers, the pandemic precipitated a shift in priorities, encouraging them to pursue a ‘dream job’, or transition to being a stay-at-home parent.” The pandemic taught many workers that life is simply too short to stay stuck in a bad job.

For many other workers, the decision to leave will be based on how they were treated during the pandemic. “Workers expected their employers to make moves to help alleviate, or at least acknowledge, those concerns – and companies that failed to do so have suffered.” A study by HR software company Personio of workers in the UK and Ireland also showed that more than half of the respondents who were planning to quit wanted to do so because of a reduction in benefits, a worsening work-life balance or a toxic workplace culture.

We may be seeing a major shift in the power balance between workers and employers. Industries such as retail and food service are finding it very difficult – very, very difficult –  to hire reliable workers. Part of the immediate issue is the extension of unemployment benefits and other emergency relief measures that allow workers to get by staying at home a while longer – or look for a job in another industry.

The American retail sector has seen more recent resignations than any other industry. Just fewer than 650,000 retail workers quit in the month of April 2021 alone, according to data from the U.S. Department of Labor. It was the sector’s largest one-month exodus since the Labor Department starting tracking the data 20 years ago.

In surveys, nearly all the workers said the pandemic introduced new strains to already challenging work: longer hours, understaffed stores, unruly customers and pay cuts, all while being classified as “essential” to the national economy. Post-pandemic working conditions may not include existential threats (although the current surge in COVID cases may bring back those fears), but retail and food service employees are still required to wear masks in most establishments, and mask rules are causing more customer issues.

CNBC reports that in May, The Federal Aviation Administration it has received around 2,500 reports of unruly passenger behavior since January 1, “roughly three-quarters of which involve failure to adhere to the federal face mask mandate that has been instituted due to the coronavirus pandemic.” That’s more than 20 times higher than what is normally recorded in an entire year.

Service jobs have always been a challenging way to make a living; unpredictable schedules, dealing with a cranky public and low pay. Many traditional retail jobs are threatened by the rise of online retail, and the aftermath of the pandemic may have escalated the speed of the death spiral.  Often, workers find out their restaurant or retail location is shutting its doors when they show up for work to see a sign on the door. Raising retail wages to $15.00 an hour will help, but it will also raise the cost of the goods and services the workers will be spending their extra wages on: food, entertainment, and travel.

Target, Best Buy, Under Armour and Kay Jewelers all recently increased starting minimums to$15 an hour, while Amazon is offering sign-on bonuses as high as $1,000 to new employees. We’re seeing signing bonuses offered at fast food restaurants.  The Wall Street Journal reports that  Chipotle Mexican Grill is offering free college tuition to employees who work at least 15 hours a week after four months on the job. Taco Bell is giving paid family leave to company-store managers. 

Restaurants are experiencing a labor shortage at the same time consumers are flooding back to dining out. That means some restaurants are closing an extra day a week and almost all are experiencing longer waits for tables and service. Intense competition for It’s a difficult situation that is changing the dynamics of the employer / employee relationship, possibly for a long time to come.

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