In the late 1960s a large population cohort, the so-called “Baby Boomers”, had an existential choice between fear of loss and the hypnotic call from Woodstock. Here is the first verse of Joni Mitchell’s epic song ” Woodstock” that captured the moment:
I came upon a child of God
He was walking along the road
And I asked him where are you going
And this he told me
I’m going on down to Yasgur’s farm
I’m going to join in a rock ‘n’ roll band
I’m going to camp out on the land
I’m going to try an’ get my soul free
The Boomers participated in Woodstock, smoked pot, wore bell bottoms, had love beads and grew long hair. It sure looked like a whole generation of children from World War II parents was going to opt out and forget about getting a job.
Then a funny thing happened. They graduated from college or grad school and they were no longer targets for the draft board. They were sufficiently estranged from their parents that they set out on their own.
Guess what? They had to find a job because there was no alternative. There was no concept of governmental safety nets or student loan forgiveness. You had to cut your hair and go to work.
The Great Resignation Of 2021
Fifty years later in the aftermath of the worst pandemic America has experienced since 1918, there is a new trend that is documented in a report published by Microsoft in June of 2021 entitled “The Next Great Disruption In Hybrid Work” It predicts a large percentage of the world’s work force has or will quit their job:
“With over 40 percent of the global workforce considering leaving their employer this year, a thoughtful approach to hybrid work will be critical for attracting and retaining diverse talent. To help organizations through the transition, the 2021 Work Trend Index outlines findings from a study of more than 30,000 people in 31 countries and an analysis of trillions of productivity and labor signals across Microsoft 365 and LinkedIn.”
The Microsoft Report has some interesting conclusions:
- Flexible Work Is Here To Stay
- Leaders Are Out of Touch With Employees
- High Productivity is Masking an Exhausted Workforce
- Gen Z is at Risk of Dropping Out Completely
- Talent is Everywhere in a Hybrid World
I have since read numerous follow on explanations for this employment migration. NPR, BBC, CNBC, Tech Republic, The Guardian, ABC, The Boston Globe, Forbes and The Foundation For Economic Education all have theories:
- Stay At Home Parenting
- Long Commutes
- Fear of Workplace Safety
- Sign On Bonuses
- Work/Life Balance
- Higher Pay
- The Nuclear Family
The Real Reason Workers Are Quitting
But only one explanation makes sense to me. Workers are quitting because they can!!!!
Government safety nets and manufactured prosperity like unemployment insurance, moratoriums on evictions and mortgage foreclosures, rent controls, delay in federal tax payments, surging asset valuations for many asset classes like homes and common stocks all come together to eliminate fear of loss.
The “Foundation For Economic Education” makes the most interesting observation:
“Obviously, without the guarantee of a cushy taxpayer-funded unemployment payment, many of these employees would not have the luxury of simply quitting their jobs. They would have to increase their value if they wanted to demand new working arrangements on the market, or build their way into new career paths while still holding down employment in the meantime.”
Three rounds of stimulus payments totaling more than $850 billion may have simply overwhelmed worker responsibility for self improvement as a stepping stone to a better job with aligned benefits. It may be easier to quit and figure it our later when the subsidy runs out.
How Will This End
I am not sure how the “great resignation” will end, but it portends different relationships between employers and employees with hybrid work at the core of that relationship. It also foretells an uneasy competition between the private sector creating jobs, and central authorities providing many good reasons not to work.
The hypnotic call of getting paid not to work will likely overwhelm fear of loss to become the siren song of 21st century, and the new generation will be back on that road to Yasgur’s farm.
The above commentary is for informational purposes only. Not intended as legal or investment advice or a recommendation of any particular security or strategy. Information prepared from third-party sources is believed to be reliable though its accuracy is not guaranteed. Opinions expressed in this commentary reflect subjective judgments based on conditions at the time of writing and are subject to change without notice.
