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The "Great Resignation": the Changing Wage-Nexus in the United States and the United Kingdom after the Covid-19 Pandemic

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  • Nicholas Sowels

    (PHARE - Philosophie, Histoire et Analyse des Représentations Économiques - UP1 - Université Paris 1 Panthéon-Sorbonne)

Abstract

This communication seeks to examine how the wage-nexus has changed in the United States and the United Kingdom as a result of the Covid-19 pandemic and following what has been called the "Great Resignation" of workers as of early 2021. The communication notes that massive monetary and fiscal support for firms and households meant that unemployment returned quickly to very low levels by 2022, as labour markets tightened, partly as a result of high job quits-the cause of the Great Resignation. The latter and its multiple causes are then reviewed. Despite tighter labour markets, and low unemployment, real wages were subsequently squeezed through to the end of 2022, due to the unexpected, strong rise of inflation which began in spring 2021. It is possible that workers may be in a stronger position to push for higher pay henceforth, given labour market tightness prevailing in early 2023 and the possibility of a significant slowdown in the rise of global wage labour. This could alter labour-capital relations, which have been unfavourable to workers since the policy shifts to neoliberalism from the late 1970s onwards. However, despite the widespread popular support for socalled "frontline workers" during the pandemic, little indicated at the time of writing that workers and labour in general are getting greater political support from governments and national political institutions. In short, workers may today have some more market power, but nothing like the historical compromise of Fordism between labour and capital, which followed the Great Depression and World War II, seems likely today.

Suggested Citation

  • Nicholas Sowels, 2022. "The "Great Resignation": the Changing Wage-Nexus in the United States and the United Kingdom after the Covid-19 Pandemic," Post-Print hal-04172216, HAL.
    • Handle: RePEc:hal:journl:hal-04172216
    Note: View the original document on HAL open archive server: https://hal.science/hal-04172216
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    References listed on IDEAS

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    1. , 2020. "Temporary Layoffs and Unemployment in the Pandemic," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, vol. 2020(34), pages 01-05, November.
    2. Nicholas Sowels, 2021. "Operation Warp Speed as a “Moonshot”: Some Public Policy Lessons," Post-Print hal-03872132, HAL.
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