Saturday, January 22

Why Europe Has Not Been Affected by a “Great Resignation” from Workers Like the United States


The experts anticipated a global “Great Renunciation”, but the reality shown by the figures is different.

The phenomenon began to register in the United States in the middle of the pandemic: a massive and voluntary abandonment of jobs rarely seen in its labor market, and that makes it difficult for employers to fill vacancies.

It started with professionals ofl health sector Y teachers forced to return to face-to-face classes despite the fact that covid-19 cases continued to increase, and they left extending to other parts of the economy: service industries, retail, hospitality, food …

Having to switch from remote work to the office, exhaustion after suffering caused by the pandemic or the job burnout from low wages in unskilled sectors are some of the reasons behind these resignations, according to Anthony Klotz, an associate professor at Texas A&M University’s Mays School of Business who coined the term.

Two workers in Europe

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This panorama that the US is facing, however, is not affecting other large economies in the same way, several economists emphasize to BBC Mundo.

In Europe the effect has been very contained.There is discontent, the experts clarify, but not massive resignations.

We tell you why.

Activity rate

A technical but easy to understand fact is the best clue: the activity rate.

This index that measures the level of employment in a country fell in the eurozone from 73.4% to 71.6% in one year, that of confinements.

Less than two percentage points of decline from 2020 to 2021. Meanwhile, in the United States it fell by three percentage points in just three months, going from 63.3% in February 2020 to 60.2% in April of that same year.

“In Europe, there has been no decrease in the activity rate observed in the US Nor have we seen a considerable increase in voluntary leave or a significant increase in unfilled vacancies “, explains Juan Francisco Jimeno, professor of Economics at the University of Alcalá, Spain.

The question now is what has made the eurozone different compared to the United States so that its workers have returned to their jobs after the pandemic.

Waitress

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When restrictions were lifted by the pandemic, many American companies found they could not fill their vacancies.

Structural factors

To begin with, a structural factor must be taken into account.

Flexibility and low unemployment rates in the US lead a worker to leave their job waiting for better job opportunities and conditions, because the economy American is typically characterized by a rapid recovery in employment in normal times.

Workers enter and exit the market with easesay the experts consulted.

However, the European labor market is generally more rigid and has a lower turnover.

After the pandemic, figures show that Europeans have decided to return to their jobs instead of taking risks.

“The American job market is more fluid and that makes it easier to quit a job. Finding another job in the United States is not that difficult as in Europe ”, explains Juan José Dolado, professor of Economics at the Carlos III University of Madrid and specialist in labor economics.

So while Europe uses flexibility measures within the company when things go wrong – such as reducing the hours of its workers or cutting bonuses (bonus) or benefits beyond salary—, Anglo-Saxon countries base their flexibility on hiring and firing.

A union meeting in Germany

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Trade unions have more power in Europe than in the United States.

The role of the syndicates

“In addition, the greater union membership (that exists) in Europe and a more widespread negotiation between employers and workers imply alternative ways of showing discontent to do it through resignations ”, adds Dolado.

For Luca Nunziata, an economist and professor at the University of Padua, in Italy, trade unions also play an important role in the Old Continent.

“European labor markets work differently from the US labor market. If we exclude the United Kingdom, they are characterized by an environment institutional that traditionally privileges the protection of employment above flexibility ”, he explains.

“Besides, the collective bargaining and unions can play a prominent role, especially in some countries, “he says in reference to the homogeneity of wages in the eurozone compared to America’s high wage inequality.

Mothers walking in a park

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Paid maternity leave in Europe is generous.

But with the fact that in Europe there has not been a wave of resignations, they also have to do with labor benefits such as paid vacations, maternity leave or childcare assistance, agree the economists consulted by BBC Mundo.

And they point to the broad public assistance in job placement for those who lose their jobs through training and other resources in the eurozone countries.

“In general, the comparatively long duration of tenure in a position is a indicator of good overall quality of work. The determination and influence of works councils and trade unions contribute to this in the central sectors of the economy, ”says Joachim Moeller, an economist and professor at the University of Regensburg in Germany.

“In Europe there are less wage inequality than in U.S And that makes lower-skilled workers, more affected by the Covid-19 crisis, have greater incentives to return to work, “says Professor Jimeno.

“The working conditions in Europe are certainly much better than in many other countries in the world, and I am thinking of many developing countries where labor standards and conditions are much poorer while productivity and real wages are lower ”, agrees Nunziata.

The University of Padua professor explains that the reasons for The social benefits in Europe are historic.

Food queue

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The origin of the Welfare State was defined after the two world wars.

After World War I and II, the Old Continent imposed stricter rules and a more generous wellness system due to bloodshed and suffering in this period of history.

This laid the foundations of the Welfare State.

“The other side is un weaker labor market and less relocation of workers in sectors in decline or in sectors on the rise. This can affect potential growth once the pandemic ends, ”says the economist.

Different approaches

But for the economist Christine Erhel, from the Center for Employment and Labor Studies in Paris, the focus on how the pandemic was addressed on both sides of the Atlantic also has a lot to do with the rapid recovery of the job market in Europe.

As the United States addressed lockdowns by increasing unemployment insurance, Europe paid companies not to lay off to anyone, even though the staff was home from work.

Social protection maintained the link between workers and their companies.

Also the greater public assistance in labor insertion.

Image of a woman working from the living room of a house.

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Many workers do not want to give up the flexibility and autonomy that remote work offers.

“In general, in most European countries, the recovery has been quite strong since the summer of 2021 and job growth is dynamic,” says the academic.

And he adds: “We still don’t have evaluations, but all these policies and institutions have certainly played an important role“.

Youth employment

“Other measures (such as unemployment insurance) have provided a good level of income protection and a sustained level of demand. Some active labor market policy programs they have also targeted specific groups (especially young people), to avoid dependence on the trajectory and the lasting consequences of the crisis on their trajectories ”, he points out.

And is that young people have been one of the most affected segments of the working population.

“Employment has recovered well and the overall labor market barometer is in positive territory. This does not mean that there are not also serious problems“, dice Moeller.

As in the rest of Europe, in Germany, the main problem is that too many studies have been canceled during the pandemic.

“Due to the coronavirus, they have signed very few new vocational training contracts compared to previous years ”.

“This is a disadvantage for both young people and the economy in the long run,” he adds.


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