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Officials discuss how the great resignation will affect the economy

Posted at 10:46 PM, Nov 02, 2021
and last updated 2021-11-03 01:46:30-04

BAKERSFIELD, Calif. (KERO) — Millions of Americans are still without jobs amid the pandemic which is what officials are calling the great resignation.

For some, the pandemic has allowed Americans to reassess what they are looking for when it comes to those working conditions. For others, they’ve lost their jobs due to COVID restrictions or due to layoffs. But officials are told 23ABC that the good news is the great resignation is also paving the way for new opportunities.

“Whether it’s because of COVID, or because they’re dissatisfied with it, or they’ve been laid off, or they’re starting to see other jobs that’s paying more,” said Sherod Waite, CEO of Moneywise.

Waite said in his lifetime he’s never seen so many people displaced from their job. With unemployment rates skyrocketing to more than 14% at the peak of the pandemic.

“The truth is that wages have stagnated for a while and I think there was a feeling that the power was in the managers' court and the owners' court, but now workers have a lot more choices. And labor is tight. And that’s a good thing,” said Waite.

Political analyst Allen Bolar said it is now an employee market. Some large corporations set the tone for other companies by raising the minimum wage and making it more competitive.

"Employers are willing to do things like not only pay more but also give signing bonuses and also give referral bonuses,” said Bolar.

Bolar said there’s also a downside to this, making it harder for some employers to run their businesses.

“Because then they suddenly have to raise wages and labor costs are part of their overall budget for the business. So that means the cost of goods are gonna go up,” said Bolar.

Bolar added that some of these companies could turn to technology in order to offset some of their labor costs.

"One of the things you may see is more investment in automation. More investment in capital intensity that allows for workers to do more with a given amount of labor input. So, when you go to McDonald's you see those things where you order by the screen rather than the cashier. You might see more of that rolling out," said Bolar.

Waite said long-term the great resignation is another challenge in the economy’s journey through recovery from the pandemic.

“It’ll depend on how the economy continues to recover. How many employers are able to continue to support the increased cost- which can’t go up forever. You can’t keep paying employees so much. So eventually that will level off,” said Waite.

The current employment rate in California was last seen at more than 7% with just under $300 million paid out in benefits last week. The Kern County unemployment rate along with the state has seen the good news is Kern County is seeing a significant decrease in that unemployment number compared to at the start of the pandemic.