The choice of the term “great resignation” to characterize a rather strong wave of resignations in the United States has made it possible to highlight a new phenomenon: in all the countries where unemployment has fallen, companies encounter difficulties in recruiting, especially when there is a combination of low wages and difficult working conditions. In France, employers and the Borne government are insisting on a necessary reform of unemployment insurance to remedy this situation and encourage individuals to accept job vacancies. However, the desire for a chosen job remains a horizon of progress.
The term “great resignation” appeared in the United States (BigQuit) to characterize a wave of massive layoffs that emerged from July 2020 following the Covid pandemic. The use of the singular to characterize this phenomenon suggests that a majority of employees could quit overnight, which would call into question the entire basis of our economies.
In reality, if at the end of the pandemic some employees gave up their jobs to rethink another life by freeing themselves from paid work, the majority of resignations are the result of individuals leaving one position to find another. someone else, better paid or whose working conditions are better. If this trend is strong – 47 million layoffs in the US in 2021 – it now appears to be slowing down. While 3% of employees resigned in each of September, November and December 2021, we are at 2.8% in June 2022 compared to 2.3% before the crisis. In France, the phenomenon is three to four times less significant than in the US, although the number of resignations and contractual terminations peaked at 2.3% in the first quarter of 2022, in a context where hiring has increased. It is therefore extremely risky to speak of a phenomenon of “great resignation” in France, as has been done for the United States.
The “great resignation”, a moment in a long-term trend
On the other hand, it is necessary to place this moment in a long-term trend. The beginning of capitalism was initiated by the phenomenon enclosures, a process in which the landowners fenced off their land and displaced the peasants who lived off it to develop livestock farming. The displaced then had no choice but to push into the cities and thus formed the ideal workforce to run the burgeoning factories. There were no limits to the working days, except for the exhaustion of the workers, and child labor was the rule.
The first social legislation appeared in the second half of the 19th century.e century. Wages were gradually improved, if only to provide outlets for mass production carried out on larger and larger scales. The high point of the industrial period in the XXe century was realized in what has been called the Fordian compromise: totally fragmented and uninteresting work in exchange for ever-higher real wages made possible by the gains in productivity achieved. The crisis of the 1970s put an end to this period and began the industrial decline of Western countries in favor of an increasingly service-oriented economy. The massive emergence of new jobs in ever more comfortable offices will make industrial employment obsolete: the theme of quality of life at the workplace then begins to enter the debates, the very recent emergence of relaxation and wellness spaces in certain pioneering companies completes this development.
We have therefore in two centuries gone from a situation where individuals had absolutely no choice of job and had to accept the first job that offered in order to survive, to a situation where companies have to take into account the quality of life at the workplace, both to achieve good productivity and secure employee support for the company’s project. This particular moment of “the great resignation” is therefore part of a recurring trend that goes back two centuries.
In France, a March 2022 note from the Council for Economic Analysis states that “the state of the labor market may seem surprising. Despite sectoral and geographical differences, it has withstood the health crisis well. The situation today is close to what we observed before the crisis, with the coexistence of recruitment problems and high unemployment.”. The recruitment difficulties that companies are currently talking about are therefore a continuation of what was before the health crisis. But what is the nature of these recruitment difficulties?
A recent Dares study of 2019 data is enlightening. While companies regularly complain about not having qualified staff, it seems that those who have the greatest difficulties are those who admit to offering difficult working conditions and inadequate wages. While almost all the employers concerned (91%) mention the lack of qualified people for this type of position, the “insufficiently attractive salary” is mentioned in 26% of cases and “working conditions are considered difficult” in 15%. The sectors most affected by these latter reactions are metallurgy, transport, private health and social work, hotels-cafés-restaurants and the agricultural and food industries. In terms of working conditions, physical hardships, unpredictable hours and night work increase recruitment difficulties. It cannot be reduced to working conditions alone, but to the desire to do quality work: when the feeling of not being able to do it is present, recruitment difficulties increase by more than 30%. Recruitment problems are all the more serious for the company as it struggles to retain its employees. The first two reasons that explain the difficulties in retaining certain employees are working conditions (55%) and wages (46%), far ahead of the lack of labor (27%).
Why are employers and the government pushing for a reform of the unemployment insurance fund?
Currently, the most difficult work is generally done by poorly qualified people who, due to mass unemployment, have no choice but to accept it at low wages. As soon as unemployment tends to decrease, individuals begin to regain control over the choice of their jobs, and the companies that offer this work encounter recruitment difficulties, which poses a problem for the economy, by which we mean the aspirations of consumers.
The two barriers to recruitment – working conditions and pay – highlighted in this study have absolutely nothing to do with education. To a certain extent, it is sometimes possible to improve working conditions through investment and a new organization of tasks, but this entails additional costs. If this is not possible, it is likely that, in the face of labor shortages, extremely high wages will have to be offered to find candidates.
More generally, is it possible to increase salaries to attract candidates? This depends heavily on consumers’ ability to accept higher prices. This can be illustrated with an example from the hotel and restaurant industry. If in order to recruit staff who will work late at night and will be mobilized at the weekend, wages must be increased by 30%, are consumers prepared to accept the impact of this increase on their bills? Some will accept it, but it is likely that it will provide less coverage and thus less added value, which then contradicts the wage increase. So it could mean a declining restaurant business.
This is undoubtedly the reason why the employers and Elisabeth Borne’s government are now in a hurry to reform unemployment insurance: it is about tightening compensation conditions when employment recovers, and conversely being more generous when employment is scarce. Under current circumstances, this will push the unemployed to accept arduous and poorly paid work.
We must therefore examine this principle in the light of the historical trend towards the improvement of working conditions and remuneration. To put it another way, shouldn’t a situation where individuals have the choice of their jobs be the norm and the witness of a truly free society? Unfortunately, it is possible that this measure to limit unemployment rights will be approved by the majority in a society that accepts unemployment benefits only moderately when there are vacancies. The implementation of this reform of the compensation system would then reduce the individual’s choice of employment. Regardless of the conditions for unemployment benefit, it is therefore essential to establish a real right to choose employment.