Recent research conducted by Arindrajit Dube and his co-authors reveals that the earnings gap between high and low-income workers, which had been widening for four decades, began to narrow during this period. In just two years, the economy managed to reverse approximately a quarter of the inequality increase since 1980. The study attributes much of this progress to the increased mobility and willingness of workers to change jobs.
While wage growth for low-wage workers is no longer outpacing other groups, they have not lost ground over the past two years. Their wage gains have roughly kept up with inflation and higher earners. This suggests that the decline in turnover may not solely be due to worker caution but also because employers have been compelled to improve pay and working conditions to a level where employees no longer feel desperate to seek alternative employment.
Although the labour market remains robust, with unemployment below 4 percent and job growth continuing, albeit at a slower pace, there is a realization that workers like Cron could lose their leverage if mass job cuts occur. Kathryn Anne Edwards, a labor economist and policy consultant, expresses concern about the tenuous nature of the situation. She believes that a recession could erase the wage gains achieved by hourly workers in recent years.
The Essence of Essential
However, some workers assert that one aspect has fundamentally changed— their behaviour. While initially deemed “essential workers” during the pandemic, many individuals in the hospitality and retail sectors were disappointed to see companies retract benefits as the crisis subsided. The Great Resignation was, in part, a response to this experience. Workers were no longer willing to stay with companies that did not value them.
In conclusion, the Great Resignation ushered in a transformative period where workers demanded higher pay and improved treatment, leading to substantial job changes across the United States. While the rate of voluntary quits has diminished in recent months, workers may still retain some of the gains made during this period. However, uncertainties loom, including the potential for an economic recession and the waning leverage of workers. The lasting impact of the Great Resignation on the dynamics between employees and employers remains to be seen.