The Current American Workforce Shake-up and How Businesses Can Help

By Annie Cerria

One of the most significant changes to the American working world in the wake of the COVID-19 pandemic has been a dramatic increase in the emphasis on workers’ rights for a majority of the American working population. Many have realized that their jobs can permanently be done from home and do not require an hour-plus commute every morning, while others have realized just how poor their working conditions have been and are demanding a change. The pandemic also highlighted how dependent the economy is on traditionally “low-skilled” (and low-paying) labor. 

These collective realizations have contributed to three trends currently happening within the American workforce that are threatening to shake the nation’s economy to its core: mass numbers of workers quitting voluntarily, huge strikes at companies across the country, and unionizing at major corporations. 

These shifts have been in the making for years, well before the pandemic. Since 2013, real wages for the bottom 90 percent of the wage distribution, despite corporate profits and the national GDP rising. Many essential workers in grocery stores and hospitals have publicly stated that they felt overworked and mistreated during the height of the pandemic, and Congress’ recent failure to raise the federal minimum wage was seen by many workers as a sign that those in power do not truly value them. 

This has all culminated in the American workforce developing a better understanding of their rights, the leverage many of them hold over their companies and industries, and how dependent the American economy is on them. Therefore, it is unsurprising that the three trends that the American workforce is experiencing are occurring and show no signs of stopping. 

The first trend, collective voluntary quitting, has been predicted by some economists since 2019. However, it wasn’t until 2021 that the prediction became a reality very quickly. According to the U.S. Department of Labor, from April to June of 2021, 11.5 million workers quit their jobs, while a Gallup poll found that 48% of workers are actively seeking new opportunities

As an analysis in Inc. Magazine explains: “The cost of any turnover is expensive. For any organization to lose even a third of its workforce would be downright devastating. The impact on small and medium enterprises, where finding departments of one is not unusual, will be especially severe.”

This ‘Great Resignation,’ as some economists are dubbing it, is not the only trend that is posing a severe threat to the economy. Across the country, the recent surge in employees going on strike has the power to devastate entire industries, further putting the American economy at the behest of the current workers’ rights movement. As seen through historical examples of the United Mine Workers of America strike of 1946, or the Steel Strike of 1959, strikes have the power to be detrimental to the American economy and its workers. They have the power to negatively affect everything from GDP growth to inflation, making the dozens of major strikes currently taking place even more important to resolve. 

Strikes have been taking place recently at major companies in almost every industry of the American economy. For example, in early October, about 10,000 workers at John Deere went on strike after rejecting a contract proposal from the company that had been aided by negotiators for the United Automobile Workers’ Union. The workers argue that the proposed contract failed to substantially increase wages and pensions for workers despite the company being on track for a year of record profits.

A similar sentiment of disconnect between a company’s executives and employees can be seen when examining the current Kellogg’s strike. The striking employees are claiming that Kellogg’s is attempting to increase the number of ‘transitional’ employees, who make less and have fewer benefits despite an existing cap that had been agreed upon by the company and the striking workers’ union. 

In an essay penned to Business Insider, one striking worker described the evident gap between the employees on strike and the company, writing: “During the negotiation process, I was told the company basically said, ‘This is what we’re going to give you, and it’s not going to get much better.’ Those people are so disconnected from us. It’s a room full of blue-collar people versus the finest and most expensive law firm they can get.”

Evidently, the pandemic has exacerbated workers’ sentiments of being overworked, underappreciated, and even exploited by their employers. The mass amounts of workers quitting voluntarily shows a general exhaustion with pandemic-era working conditions, with many seeing potential unemployment as a better option than remaining employed. In nearly every industry, workers on strike are demonstrating their anger at wages remaining stagnant while many companies report record profits year after year. 

The culmination of these sentiments, and the most high-profile of the three trends, is the current increase in unionizing at several major companies. Workers at Starbucks and Amazon, for example, are currently attempting to unionize at various locations, with both sets of workers citing their companies’ pandemic-era treatment of employees as their reason for unionizing.

For example, at the Starbucks branches in Buffalo currently attempting to unionize, workers describe being overworked and underpaid. Multiple employees also told The New York Times that the pandemic made them realize how dependent the company is on its employees, putting into perspective their economic leverage. 

A similar theme can be seen among the unionization attempts at Amazon. The pandemic turned Amazon into an essential resource for the majority of Americans, increasing its profits by nearly six billion dollars. Yet, this increase in profits is not reflected in the company’s pandemic-era wages. Jeff Bezos’ net worth alone is 42 times the cost of the total COVID-19 hazard pay that Amazon is giving to its total workforce. Thus, mass unionization attempts. 

These unionization votes have the power to shut down huge sections—or even the entirety of both of these companies—if agreements are not reached. The American economy would undoubtedly be affected by a hit in production from both of these companies, as Starbucks and Amazon are two of the biggest corporations in the backbone of daily American life. A major shift in the American economy would then most likely destabilize the global economy, as well. Therefore, it is imperative that solutions are quickly found for all three of the major trends currently facing the American workforce.

Unfortunately, if the businesses affected by these issues continue to respond in the manner that they have been, that goal will be an unreachable one. Businesses’ responses to the current issues within the American workforce have been incredibly unproductive, with many major companies lashing out at their workers demanding change. Many businesses have also failed to significantly adjust working conditions or improve benefits since the start of the pandemic, driving more and more employees to quit and/or take action. 

Striking employees at both John Deere and Kellogg’s have felt the sting of retaliation from their employers. Workers at John Deere have seen their healthcare withheld from them, back wages removed from their paychecks, and injunctions against their right to picket. Kellogg’s has hired replacement workers amidst the strike at their plants and has refused to meet with striking workers, leaving the situation at an effective standstill. 

At the Starbucks locations in Buffalo, the company has stationed several additional managers at each branch to monitor workers’ activities from opening until closing, which workers have described as generating an anxiety amongst them of being under constant watch. The company is also attempting to persuade the labor board to require that workers in every Buffalo-area Starbucks participate in the unionization vote, rather than letting stores vote individually, which union organizers say will lessen the chance of the vote going through. 

Similarly, Amazon has swiftly crushed any pandemic-era attempts at unionization, with actions severe enough to earn them legal recriminations. Workers from various Amazon branches that have attempted to unionize have accused the company of a host of preventative measures, such as surveilling employees, changing traffic signals to prevent union organizers from meeting, and even firing employees who call for unionization. The company’s actions have led to lawsuits from both the New York attorney general and the National Labor Relations Board, the former due to Amazon’s retaliation against organizing employees and the latter due to their interference in a recent unionization vote in Alabama. 

These issues are not germane to just Amazon and Starbucks. Workers demanding better working conditions or looking for workplaces where they don’t have to settle when it comes to on-the-job benefits are not going to be satisfied with intimidation tactics or retaliation against those who demand change. This is a problem of worker-executive relations, which will need to be solved by compassionate responses and compromises from employers. 

As the Inc analysis summarizes: “Whether due to a fear for personal safety, a lack of fair treatment, having to deal with a horrible boss, or an inequitable work-life balance, those fleeing what might be viewed as perfectly good jobs are simply choosing to put themselves first for a change. Employers who beat them to the punch by taking steps to create environments where associates feel safe, valued, and more empowered to make their own scheduling choices stand a great chance of keeping these employees.” 

Businesses who respond negatively to their employees’ requests demonstrate a lack of compassion and concern for their needs in the workplace. Therefore, if businesses continue to display no inclination toward working with their employees or at least meeting with them to discuss their requests, all three of these trends will spread to more and more workplaces, potentially devastating the economy. 

An increase in voluntary turnover has the power to completely disrupt smaller and mid-range businesses that do not have the power to quickly replace employees they lose, which in turn will negatively impact larger businesses that partner with the smaller ones, eventually disrupting the entire economy.

Large numbers of strikes at businesses providing essential labor—such as factory work—coming at a time when the global supply chain has already been severely challenged by the pandemic will only further rattle the American economy, making already hard-to-find goods that much scarcer. 

Unionization at major companies can lead to stagnating productivity due to increasingly tense workforce-executive relationships. This also has the potential to bring a major sector of the American economy to a halt, as both of these businesses now act as everyday essentials for most Americans. A sudden drop in productivity could be devastating for many. 

To put it plainly, the businesses being affected by these issues must take the initiative to fix them, because they are to blame here. Their sub-par pandemic working conditions and wages were responsible for driving employees to organize or quit altogether, leaving it up to them to remedy the problems they caused. Executives of these businesses need to realize the impact that major employment disruptions at their companies have on the whole economy and must sit down with employees to reach solutions that benefit all parties involved in order to resume normality. Additionally, the federal government has a responsibility to step in and mediate these discussions, as they have the power to force solutions to occur quickly to prevent further economic disruption. 

If the pandemic highlighted one thing for humanity, it is the importance of working together. All of these workforce trends are issues of disconnect between workers and their executives, and therefore will only be solved through effective listening and collaborative solutions. It is imperative that businesses make swift changes to their current problem-solving methods, or the American economy could be in big trouble.

The views expressed in this article are the author’s own, and may not reflect the opinions of The St Andrews Economist.

Photo by Adolfo Félix on Unsplash

One Comment Add yours

  1. Cookie Cogan says:

    Excellent, in-depth look at the most pressing issues facing to US workplace today.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s