“If you want explanations for the phenomenon of the Great Resignation, don’t ask any economists,” says Dr. Eli Cook, Israeli historian in the field of American capitalism and modern economic thought at the University of Haifa. “It’s exactly the kind of economic phenomenon that they can’t explain.”
According to Cook, it is very difficult to provide an economic explanation for why millions of Americans are leaving their workplaces at this particular moment. Conventional economic wisdom would seem to encourage people to hold on to their jobs now that the stimulus payments in response to the COVID-19 crisis have ended. But instead, they’re quitting, and in high numbers.
Data released by the US Bureau of Labor Statistics show that this September, the most recent month for which data were available, nearly 4.5 million workers left their jobs voluntarily, an all-time high.
Davar sat down with Dr. Cook to explore this phenomenon.
“Classical economists believe that people only want to maximize their profits, but here we have a revolutionary change in the way that Americans see themselves and their priorities,” Cook says. “In order to understand this, you have to understand historical and social processes that influence how people understand the world.”
“The working class is an integral part of consumerist culture”
“The genius of American capitalism, and one of the reasons that it became the strongest economy in the world, is that Americans always manage to convince the working class to work like donkeys for low wages in order to consume the products that they themselves make,” Cook explains.
Cook argues that the American working class is an integral part of consumerist culture and is in fact the class that has most deeply internalized the consumerist ethos. American workers are willing to toil at minimum wage in order to buy a new iPhone.
“When Americans received unemployment benefits during the lockdown, for some of them it was their first taste of free time in their entire lives,” Cook explains.
“This enabled an entire generation of Americans, for the first time in their lives, to stop, experience rest and free time, develop hobbies. I think it changed them. Suddenly they wake up and wonder: ‘Why work so hard?’”
This raises the question of how these workers make a living, what Dr. Cook calls “the million dollar question.”
“Is it that they’re going back home to live with their parents? Is it that they’re not paying rent because there are still restrictions on evicting tenants, and the moment that it becomes possible to evict people they’ll go back to work?” he asks.
“I’m very skeptical as to how fundamental this change is, but if in another four or five years people aren’t returning to the labor market, that could trigger more serious changes.”
“This could end up being a temporary phenomenon, maybe in a year we’ll look back at the Great Resignation and say that the working class tried to change its conditions, but in the end people had to eat so they went back to work,” he continues. “Marx has said that this may be capitalism’s greatest weapon: work or starve.”
“The food service industry has already seen wages increase”
Dr. Cook maintains that this trend could be the result of generally low wages.
“There are economists who believe that these resignations will lead to a meaningful increase in workers’ salaries. That people are showing that they have power and are just waiting for a better offer,” he says.
“I’m very curious to see if in the long term, we will in fact see Americans’ wages go up, which is something that we haven’t in the last 40 or 50 years of American neoliberalism.”
Cook is doubtful that this is what will happen, in part due to the centralized structure of the American economy which is based on large firms that pay minimum wage.
Still, Cook notes that certain sectors, such as the food-service industry, have already seen wage increases. But in the meantime, the percentage of resignations continues to rise.
“People aren’t only looking for money. They’re looking for freedom. They had a sweet taste of free time, hobbies, and family time, and they want freedom,” Cook explains.
"You have to remember that we’re mainly talking about workers in jobs that, even if they’re not physically difficult, are very straining mentally. These are people that are constantly being told what to do and being watched. It’s humiliating, boring, and hard.”
“We’re talking about low-wage workers with no benefits”
Cook notes that the present wave of resignations is being driven by a distinct socioeconomic class. There is no wave of resignations among hi-tech workers in Silicon Valley, but rather among low-wage workers without employee benefits.
“I think this makes a difference, because an American worker who has family health insurance through their employer doesn’t quit on a whim,” Cook says, noting that he personally knows several people who have spent years working in jobs that they hate because they provide health insurance.
“But if my job doesn’t even include health insurance, then in any case I’m barely scraping by, and there’s nothing supporting me besides my pitiful salary, with a federal minimum wage that hasn’t gone up in nearly 40 years.”
Cook predicts that there will be a strengthening of employers known as “corporate liberals,” who understand that in order to preserve their power and their workforce, they have to offer their workers more, and not just financially: more vacation days, breaks, welfare, stock options, flexible work hours, and more.
“This is what happened in the US in the 1930s and 40s with employers like Ford and General Motors,” he says. “When Ford, for example, began offering workers five dollars an hour, it was partly because workers would quit their jobs at the factory after a month because of the difficult labor, but also from a real fear of socialism, of workers’ unions and strikes.”
It still remains up for debate if the American labor movement is gaining strength, despite more and more strikes.
“There’s definitely more labor organizing, but you don’t see this expressed in numbers of workers joining professional unions like in Israel,” Cook says. “It demands a serious change in American labor law, because in most of the states it’s very very hard to establish a union.
“So you see a strengthening of movements like ‘Fight for 15,’ [the movement to raise the federal minimum wage to $15 an hour], which aren’t really unions, but do represent a certain kind of labor organization.”
“If you don’t have a union, what’s left is the option to quit. You can see this in places with unions, for example the Hollywood production workers, who were on the verge of the first economic strike in their history,” Cook says.
“There’s also an ongoing strike now of tractor manufacturers at John Deere, and what’s interesting about that is that it’s being led by workers from the white working class, the same social class that characterizes Trump voters, alongside Black and Latino workers. It’s a very powerful consolidation of class power that’s bringing together people who are different from each other outside of the framework of party politics.”
“The working class understands that the solution won’t come from politics”
According to Cook, Joe Biden is probably the most labor-friendly president since Lyndon Johnson. Still, Biden has struggled to gain support in the Senate for a pro-union agenda.
“The sense is that the working class understands that the solution won’t come from politics and that they have to take matters into their own hands,” he says. “Two of the tools to do this are strikes and resignations.”
“It’s very hard to predict what will come out of this tension between politics and grassroots organizing. The people who are leaving their jobs aren’t necessarily excited by the Democratic party, and Biden is at a low point in polling. It’s hard for me to imagine a political movement that can bring together all of these different stakeholders, but you never know.”