The Great Quitting, many industries are going to be hard hit

  • The great quitting is impacting all industries

  • People in bad jobs have realised they are bad jobs and are not going back

  • People remember how they were treated before

  • Many business/organisations barely work even with low labour prices

  • This is a massive challenge to eg theatre, truck drivers, cheap food retail etc.

  • Well-paid jobs also have good non-monetary benefits, are basically good jobs

  • This strengthens the case for certain Big Businesses eg tech, high skilled services

I’m having thoughts on the great quitting. No one is quite sure what is going on. But I am moved by this idea for US (and EU) workforce that low wage workers now can see how crap their jobs were and the current level of incentives is not enough - way not enough - to induce them back to work. It combines these observations:

Status Quo bias. We get stuck in a rut until we get knocked out of this rut by an outside force.

Workers in crappy jobs did not fully appreciate how crap those jobs were until they stopped doing them.


This we can see on the study on commuting patterns.  See eg economist Tim Hardford here on how people needed to be forced to change commuting patterns to realise their main commute was flawed. 

 

Harford draws a different conclusion on remote work patterns, but he offers no comment on what I see as the potentially more major observation 


“ A few hours of disruption were enough to make them realise that they had been doing commuting wrong their entire adult lives.”


This is not about “remote” but about these workers now can see how crap their jobs were and the current level of incentives is not enough - way not enough - to induce them back to work.


It’s not only pay/incentives now but how they were treated before…


You can see this in what Alice Saville has said on the “theatre hiring crisis” she writes:


As an anonymous senior backstage professional who’s struggling to hire technical roles put it, “It’s a perfect storm. People were made redundant during the pandemic and have found other roles. People have retired. And people who are still working in theatre don’t want to work the same hours as before, because the working conditions are worse and the money is less.” When the pandemic hit, theatres made redundancies swiftly and often painfully: many chose not to take advantage of the furlough scheme which would have allowed them to retain staff. And now, they’re feeling the burn. They’re committed to staging productions planned before the pandemic hit, but often with less money and less time. And their once-dedicated permanent staff have been replaced with a scramble to find workers, often on short-term contracts.

TV and film opened up before theatre, and they soaked up large numbers of talented technicians. Not everyone has fallen into new jobs they actually want to keep longterm. But workers who want to return are faced with a stark choice: stick with their secure non-theatre job, or chance it on a badly-paid, short-term theatre contract that may not be followed up by more work. One anonymous designer explained that a leading Scottish theatre can’t persuade its casuals to return after it programmed a series of short run works coming out of the pandemic: “it’s heartbreaking to me that there are workers getting more out of a full-time job in a supermarket chain than they do by going back to coming back to this industry.”

Where salaried roles are being offered, they can’t hope to compete with other sectors. Leeds Playhouse are currently advertising a senior lighting technician job at £18,000 – a surprisingly low salary for a role that requires a high level of experience and specific expertise. Meanwhile, the average salary for a professional electrician is £35,000, and a lighting technician in film or TV can hope for a similar or higher rate – as can similarly experienced staff in other departments of many theatres. As one designer said of the role: “the application package for the role talks in detail about the importance of diversity but we’ve seen again and again and again that the biggest barrier to diversity backstage is money.”

The current situation definitely isn’t the “building back better” scenario a lot of people hoped for during the pandemic.

Alice Saville here.

I can also tell you that London based electricians can earn much more and have a better time than #35K at the moment.

One counter argument is… was it not the furlough money? But, this doesn;t seem to be true:

“...Earlier this year many people insisted that enhanced unemployment benefits were reducing the incentive to accept jobs. But those extra benefits were eliminated in many states as early as June, and nationally in early September; this cutoff doesn’t seem to have had any measurable effect on employment or labor force participation. …”

 

Possibly you can argue this:

 

“...Another story, which is harder to refute, says that the extensive aid families received during the pandemic left many with more cash on hand than usual, giving them the financial space to be choosier about their next job…”

 

Both Paul Krugman in the NYT.  

 

If this insight is correct and not fully appreciated then this is the start of a transition in human capital…

 And at least for theatre, I am not hopeful at the moment and for a whole array of industries, I am very uncertain how this pans out.

Was 2020 a turning point year?

Why do I think 2020 may be a rare turning point year?
I still think there’s a decent chance that COVID will fade from memory and we will have learnt little (this would make it like Swine flu). But, I think that chance sits around 30% and moving lower. This is partly due to the length of time COVID will be affecting us and partly due to our response both innovation-wise and public health wise.

On the positive front we have had many science innovations not least on the vaccine and biomedical front:  mRNA technology looks set to prove long-term robust to make many kinds of vaccine. We have a malaria vaccine in late stage testing, Deepmind/AI has made advances in protein folding modelling, and new molecular entity drug approvals (excluding vaccines) was c. 51 this year in the US, which is in line with the last few years in terms of therapeutic innovations. With gene-editing technology and our increasing knowledge and comptuting power, biomedical advances for the next 10-20 years look promising to me.

Environment-wise: We’ve had China, Japan, South Korea commited to carbon net zero. Battery technology has continued to improve. Solar power is the cheapest form of energy in many places. Even Nuclear (mini) and fusion technology has continued to improve. Apple has joined the electric vehicle / driverless car race. 

Governance-wise: We had fiercely contested US elections that have essentially been peaceful and robustly managed given that over 161 million Americans voted. UK and EU managed to agree a Brexit trade deal. 

My guess is that certain people will be inspired by science and innovation as having some answers to our challenges that will make them place more bets here and invent more valuable things that will improve human welfare and the environment. That COVID has triggered an enhanced ability to work out of the office should help bring more productivity and people to work and develop and, hopefully, this should also bring about better welfare.

Many of these improvements are slow-moving - like our overall improvements in human life expectancy and welfare. Many of us both misjudge how far we have come, and perhaps if we understand our progress we misjudge the challenges which are still great.

But we will need both parts. To understand where we have made progress, where we still have challenges and to use the opportunities COVID has given us to do better while trying to defeat its catastrophic impact.

That's not to downplay the awfulness of COVID. That's with us. But how we react is still up to us.

I remain more worried about creative arts practitioners.While over the long-term creative industries have typically bounced back from hard times, I think 2021 will continue to be hard and I see many brilliant creatives having to leave the arts and related work. It’s hard to measure the value of arts and the financial rewards are low for the majority. There is little joy in a future generation of creative work when this generation is so hit.