Great Resignation (Big Quit)

In 2021, US workers began leaving their jobs at record rates. A CBS News report from January 2022 noted that approximately 20 million individuals in the US labor force left their job during the final six months of 2021. Observers and economists widely describe the phenomenon as the Great Resignation or the Big Quit.

Many experts contend that the coronavirus 2019 (COVID-19) global pandemic was the leading catalyst for the Great Resignation. As the early waves of the pandemic wound down, economies reopened, and workers began resuming their regular duties. However, fear of contracting COVID-19 and a growing dissatisfaction with wages, salaries, and benefits were blamed for the massive number of people who elected not to return to their jobs over the course of 2021.

Yet, a more detailed analysis reveals that the origins of the Great Resignation may pre-date the COVID-19 pandemic. The US “quit rate,” which describes the percentage of workforce participants who voluntarily leave their jobs during a given period, had been following a pronounced upward trend since the beginning of the economic recovery from the 2008–09 Great Recession. Thus, some believe that the Big Quit is linked to a set of broad, ongoing economic changes taking place in the United States.

Background

In 2007, the US housing and credit markets began experiencing warning signs of stress that manifested in a dramatic crash of the international financial markets in the fall of 2008. The downturn signaled the beginning of a deep and crippling economic collapse referred to as the Great Recession. The Great Recession peaked in 2008 and 2009, but its aftereffects were felt well into the decade that followed. These were both financial and cultural. Large numbers of people became disillusioned with what they viewed as a corrupt and an unfair financial system that leaves members of the working class most heavily exposed to its inherent risks. By 2011, the Occupy Movement was staging a high-profile mass protest in New York’s Wall Street financial district.

A steady but slow economic recovery from the Great Recession defined the US economy during the first half of the 2010s, with the United States coming to enjoy historically strong financial performance during the presidency of Donald Trump. However, the abrupt onset of the global COVID-19 pandemic in early 2020 brought a sudden halt to the nation’s economic fortunes, with business shutdowns implemented on a nationwide scale as part of a bid to limit human interaction and contain the spread of the novel pathogen. Both the United States and global economies suffered sudden, deep losses, and an unprecedented number of workforce participants suddenly found themselves dependent upon emergency financial support from the government.

After the first generation of COVID-19 vaccines arrived in late 2020 and early 2021, the United States and international economies gradually reopened. By the spring and summer of 2021, economic activity had returned to near pre-pandemic levels in many places. However, at the same time, economists began to note a strange and paradoxical feature of the labor market—it simultaneously had high unemployment rates and high job vacancy rates. Employers reported that they were unable to fill employment openings even as the “quit rate” in the US reached an all-time high.

Overview

The Great Resignation began attracting significant media and scholarly attention in April 2021, when approximately four million US workers voluntarily quit their jobs. Initially, the phenomenon was largely confined to lower-paid positions with little workplace flexibility, such as those in the retail and restaurant industries. However, over the months that followed, a growing number of higher-paid professionals also began to leave their jobs in mass numbers. In September 2021, 4.4 million US workers chose to leave their jobs, creating the highest quit rate seen since the US Bureau of Labor Statistics (BLS) began tracking the metric in 2001. That record was quickly eclipsed in November 2021, when an additional 4.5 million people quit their jobs. By the end of 2021, an unprecedented 40 million US workers had voluntarily abandoned their employment over the course of the year.

Analysis from early 2022 noted that the character of the Great Resignation had changed significantly over the course of 2021. In its initial stages, the Big Quit was largely driven by disgruntled workers earning relatively low wages in public-facing jobs with high levels of interpersonal contact. This was explained easily enough by citing concerns related to COVID-19. However, by the end of the year, mid-career professionals in the 30–45 age range were leading the phenomenon. According to poll data reported by Forbes, almost 40 percent of US white-collar workers said they would sooner quit their current job than give up their remote working arrangement in favor of a return to traditional onsite employment.

Several features of the Great Resignation link the event to the COVID-19 pandemic. It occurred just as businesses were implementing their post-shutdown return-to-office strategies, suggesting links between the voluntary resignations and a planned return to onsite employment. The US healthcare industry was also one of the economic sectors that experienced the largest number of resignations, which observers largely attributed to high burnout rates precipitated by the stresses of assuming greater personal risk and working long hours during a major global health crisis.

However, more detailed analysis suggests that while COVID-19 functioned as a catalyst for the Big Quit, it may be more accurate to think of the pandemic as a “symptom” rather than a “cause.” After reaching an all-time low of 1.2 percent in September 2009 during the throes of the Great Recession, the US quit rate steadily inched upward over the course of the 2010s; some insiders believe this reflects growing levels of public disillusionment with the imbalances and excesses of the employment landscape relative to the larger national economic system, which the Great Recession exposed and accelerated. The US quit rate temporarily plummeted in early 2020 during the initial stages of the COVID-19 pandemic, when people were wary of quitting their jobs given the pervasive economic uncertainty. The national quit rate then began its dramatic vertical climb, spiking at record rates to reach an all-time high of 3 percent in the fall of 2021. By 2023, many major news sources reported that the Big Quit had ended.

Some analysts believe that the general long-term trend of a rising US quit rate is linked to an ongoing shift away from a manufacturing economy to a service-based economy. Jobs are becoming increasingly specialized and tied to technology, with the internet making it increasingly possible to decouple many forms of work from a physical location. Employers offering less flexibility with offsite working arrangements tended to experience elevated quit rates relative to those with more leeway. At the same time, businesses struggled to recruit workers to fill relatively low-paid jobs in public-facing roles. Experts described this aspect of the Great Resignation as a largely horizontal move, as workforce members who would otherwise have filled those jobs elected instead to seek employment paying comparable wages but with lower levels of public contact. Research also showed that many workers in retail and hospitality jobs increasingly found jobs in which they were able to earn higher pay with more flexibility, causing those industries to become even more desperate for workers. While white-collar workers left their jobs at lower rates, they also increased demands from their employers for better pay and working conditions, with the knowledge that higher competition made it more likely for employers to meet those demands.

Bibliography

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