What the thing is
The Great Resignation, also known as the Big Quit and the Great Reshuffle, was a mainly American economic trend in which employees voluntarily resigned from their jobs en masse, beginning in early 2021 during the COVID-19 pandemic. The most cited reasons were wage stagnation amid a rising cost of living, limited opportunities for career advancement, hostile work environments, lack of benefits, inflexible remote-work policies and long-term job dissatisfaction. Workers in hospitality, healthcare and education were the most likely to quit, and many of those leaving were retiring baby boomers.
Where it came from
The US Department of Labor first measured quit rates in December 2000, and until February 2021 the monthly rate never passed 2.4% of the workforce. The pandemic began the other way: in March and April 2020 a record 13.0 and 9.3 million workers were laid off, and the quit rate fell to a seven-year low of 1.6%. As the pandemic went on, workers began to quit in large numbers despite initially high unemployment. Stimulus checks likely gave many the security to resign, and the pandemic let workers rethink their careers, work conditions and long-term goals. Many wanted to keep the freedom of remote work and schedule flexibility. Anthony Klotz, a management professor at University College London, coined the term in May 2021, when he predicted a sustained mass exodus.
What it gets right
The quits were large and measurable. The Bureau of Labor Statistics counted 47 million Americans quitting in 2021. Food service quit rates reached 6.8% in October 2021, against a 20-year industry average of 4.1%, and retail had the second highest rate at 4.7%. About one in five healthcare workers quit between the start of the pandemic and November 2021. Wage growth reached 4.5% in December 2021, the highest since June 2001. By August 2022 the US workforce was larger than before the pandemic, and many workers had traded up to higher pay, more benefits and better schedules; some started or joined unions.
What it gets wrong
Some economists described it as akin to a general strike, especially with regard to retail workers. Yet workforce participation in some regions returned to or passed its pre-pandemic rate, which suggests many workers were swapping jobs rather than staying out of work for long. In February 2022 Australia’s treasurer said the labour market was seeing a “Great Reshuffle” rather than a “Great Resignation”. Some who quit regretted it, and businesses were not always keen to rehire them. Many dissatisfied workers could not quit because of economic barriers. The causes are also disputed. An IMF working paper attributed 35% of the employment shortfall in the US and UK to workers aged 55 to 74 leaving the labour force, while Harvard Business Review reported that resignation rates for those aged 60 to 70 fell in 2021. Others pointed to a shortage of migrant workers rather than mass quitting.
Why it matters now
Klotz later predicted the plateauing of the quit rate in 2023 and the end of the Great Resignation, and by mid-2023 the quit rate had more or less returned to its 2019 level. By the end of 2023 the balance of power in the job market had shifted back towards employers as hiring cooled. There is disagreement over whether the episode had a lasting effect. Companies invested more in automation, and the Great Resignation and the growth of remote working left an oversupply of office space, and developers responded by demolishing or converting buildings into housing. New terms followed, including quiet quitting, quiet firing and the Big Stay. Abroad, India’s IT sector saw more than a million resignations in 2021, and China saw a similar social protest movement, tang ping, which began in April 2021.
Is it worth your time
Yes, if you want to understand the labour market after the pandemic. It is a clear case of a surge in quitting with several overlapping causes, and the figures are specific. Treat the larger claims, such as a general strike or a lasting shift in workers’ power, as contested.
