The term labor market does not do justice to the complex relationship between people and their employment. Unlike ordinary goods and services, such as steel plates or coffee cups, workers pay attention to how they are treated and have other ways of spending their time. All of this came out very clearly these days, when US railroad workers threatened to strike for better working conditions, such as paid health leave. In Minnesota, nurses crossed their arms for higher wages and the right to reject what they see as risky working conditions. In Pennsylvania, nursing home workers have just gotten a raise in their paychecks and a limit on the number of patients they each have to care for. All of this suggests that workers’ mentality and bargaining power have changed a lot in recent years. One consequence is that labor has become scarcer and more expensive.
It is clear that workers’ ideas and expectations have steadily evolved over the past century, reflecting deeper changes, for example on issues such as child labor, the fact that mothers should stay home after childbirth or that children employers should pay overtime and health insurance. But sometimes a single event has the power to accelerate change. World War II gave a strong boost to women’s participation in the workforce. Likewise, the covid-19 pandemic has favored a reconsideration of what workers are willing to do, for how many hours and for what wages.
There are empirical data that seem to point in this direction. In the United States, the unemployment rate is 3.7 percent, a level comparable to 2019, but there are far more jobs available. The share of the population working or looking for a job – the participation rate – has dropped significantly with the pandemic and has not yet fully recovered, especially among those aged at least 54.
These data could also underestimate the decline in labor availability. According to a study conducted by Ayşegül Şahin, of the University of
Texas in Austin, together with two colleagues, after the pandemic this indicator shows a decrease among men, women, the elderly, young people, middle-aged people, full-time workers and people under the age of work. According to the authors, considering not only the number of people ready to be hired but also the amount of hours they would have liked to devote to work, at the end of 2021 companies had far fewer potential working hours available than in the period before the pandemic.
Several factors can erode the willingness to work. First, alternatives such as hours spent with the family or dedicated to free time can become more tempting. Working from home may have turned out to be so enjoyable that some people prefer to quit rather than go back to the office. For some, the decision was made easier by raising their stock or by government subsidies. Others have simply begun to place less value on money.
Second, working itself may have become less enjoyable. Covid-19 has made face-to-face work more risky while vacancies and absences have made the burden for those who had to go to work. This has been a crucial problem for railway workers, who are increasingly being asked to cover the shifts of colleagues who are sick or simply absent, reducing their free time or time spent with the family. However, these workers must also do their regular hours. The latest contract signed does not completely solve the problem, but at least provides for an increase in sick leave.
In some cases the effect of working conditions is quite evident. Long before Covid-19, nursing home workers felt overworked and underpaid. This is what Matthew Yarnell, president of Seiu healthcare Pennsylvania, the union that recently negotiated the contract with several nursing homes in the state, says. In a seven-hour and fifty-minute daily shift, a qualified nurse can find herself looking after twenty – but sometimes even fifty – patients. “Almost all of them depend entirely on you. You can’t take care of so many people in one day and be happy with your job, ”says Yarnell.
The pandemic, continues the trade unionist, has led to a peak in demand and a surge in health risks, aggravating the shortage of staff. Across the United States, 30 percent of nursing home employees quit their jobs during the pandemic. In 2019, 7,000 people in Pennsylvania had applied to become qualified nurses. In 2020 and 2021, the number of applications dropped to two thousand per year. The collapse was a sign that people were no longer willing to tolerate the same working conditions for the same wages. With the new contract, the hourly wage has increased by an average of 20-25 percent and the number of patients a nurse has to deal with in one day has been limited, from first to twelve and then to ten.
How long will this new mentality and its bargaining power last? Things may already be about to change: from some polls conducted by Şahin and his colleagues it emerged that this year workers have returned to wish for a higher number of hours. Workforce participation also increased in August and, according to security firm Kastle Systems, the share of people in the office reached 47.5 percent in early September compared to pre-pandemic levels.
And that was before the Federal Reserve (Fed, the central bank of the United States) began to cool the economy by increasing the cost of money. Much of the shift in willingness to work “is driven by historically higher workers’ bargaining power, in turn linked to high demand for staff, the global pandemic and severe labor shortages,” Şahin said. “An unemployment rate above 6 percent could quickly reverse these views on work.” ◆ gim