I never had the chance to experience the Great Resignation or its effects. I retired back in September, 2020. But I find it interesting. I enjoyed going to the office, the camararderie with my fellow workers (well, at least most of them) and the lunches with the associates in my office. And there’s nothing like lunch time in NYC, so working and lunching there for almost half my career was always an adventure.
My daughter Kate had a similar experience. She works for an environmental company and she enjoyed going to her office and the socializing among her office mates. Then Covid hit. Everyone began working from home. And her company realized they could make it permanent and save on certain office and admin expenses and be Covid-safer since there would be limited face to face time. And now she is unhappy. She misses the interactions. Let’s face it, when you goof around in the office together, sometimes new ideas pop up. In complaining about how things are (or were), we often devise better solutions and organizations improve and prosper. Not as much now.
With everyone zooming each other, everyone is turned off, it makes it harder to make each person shine. The extroverts take over the Zoom call and the quieter but substantial voices get drowned out. Plus, it’s not as much fun.
Sure, Kate enjoys being at home, it has its advantages. But she’d prefer being with everyone face to face and let’s face it, productivity is only going to be higher when you are a few doors away from your boss, rather than working from home where there are too many distractions. Yes, I’m talking about the TV, refrigerator, computer games and internet searches.
But what does it really mean when we live in a world where our jobs are suddenly taken from us and transformed into living and working out of our homes 24/7? Yes, for some workers, it’s always been this way. My wife has been a freelance writer and prefers her home office to writing in a cubicle at a publishing company. For many, this represented no transition at all. For most, it has been a huge disruption.
It is providing a voice though for many disenfranchised workers. We read that so many employees in the fast food, restaurant, retail and other service sectors are quitting at alarming rates and employers are struggling to replace them. I’ve seen the effects in our community. My wife and I tried to visit a few restaurants in Bethlehem, PA but signs were posted on many front doors explaining they could not get sufficient staff to open up for business that evening (a Friday). They were only operating during limited hours. So it’s more than a disruption; it’s an alarm going off telling us the job market is broken. It helps employees because they have much more leverage than they used to have, they can demand more: wages, benefits, working hours. But abusive customers only fuel the fire as many employees run out saying, “I don’t need this stress anymore.”
So what will happen as the economy continues to churn along and so many office buildings, strip malls, stand-alone stores and restaurants recede into ghost towns? Many REITs (real estate investment trusts, an option to invest in groups or blocks of real estate rather than just one entity) are seeing their fortunes change. These REITs were sometimes Wall Street’s darlings, but the dust has to settle first. Some REITs, too heavily invested in old-fashioned shopping malls, might find themselves mired in debt and not enough opportunity for growth. Others will change tenants and lease agreements to capitalize on the changing real estate market across the globe. We began seeing this happen before Covid, where many desolate malls were turned into senior residences, hospital annexes or schools. Now this trend is poised to accelerate, but I suspect the supply will soon outstrip the demand.
As for the American worker:
- Wages are set to rise 3.9% during 2022, the most since 2008 according to the Conference Board.
- Hourly wages rose 4.8% between November, 2020 and November 2021, according to the Bureau of Labor Statistics latest data release.
And according to the Insider’s Ben Winck and Juliane Kaplan, “the American Worker is about to get their biggest raise since 2008” and “rethink enmasse what they want out of work and hold out for higher wages.” They cite:
- In the traditional low-paying Leisure & Hospitality sector, wages soared 12.3%
- The average business raised its salary budget by 3% in 2021 – that’s up from 2.6% in April
Inflation does not help: prices increased 6.2% year over year in October according to the Consumer Price Index.
In an article in USA Today, December 8, Paul Davidson wrote that the Labor Department reported there were 11 million job openings posted by employees in October, up from 10.4 million in September. With “7.4 million unemployed Americans in October, that means there were 1.5 available jobs for each unemployed person, the most on record dating back two decades.” And “workers are bolting in record numbers to take advantage of the abundance of job openings and higher pay.”
Are experienced workers taking advantage and parlaying their skills and contacts to become entrepreneurs? A Digital.com survey says one-third of workers have quit jobs to launch businesses.
The contractor market could become a much larger segment of the job economy. New contractors (startups) will need all their social media and SEO skills to attract and identify prospective clients in the new economy. We will see this trend play out in the coming years. My prediction is that will be the next step in the economy as fed-up employees, tired of working to make someone else rich, strike out on their own as never before. Forget Silicon Valley, watch out for Main Street.
Chris Ebel
12/17/21
Photo credit: @mjamesno