The Great Reset

The pandemic may force longterm changes in the labor market for workers

TEN years ago, when I started writing a book on failure, I discovered something very odd: When people described the best thing that ever happened to them, they often also described what sounded like the worst thing that ever happened to them. Sure, some people cited kids or weddings or wonderful job opportunities, but others highlighted such notable events as getting fired, enduring crippling accidents or going to prison.

This was not just a matter of cheerfully making lemonade from life’s lemons. Many of these people were sincere. Many of them were right, as my own experience attests: The reason I ended up having a fulfilling career as a writer is that my management consulting job evaporated in the 2001 recession, and after two years of soul-grueling unemployment, I was unable to find another such job.

That’s not to say that disasters aren’t disastrous — and sometimes breed further catastrophe. But sometimes they function as a kind of reset button: knocking us out of our old ruts and opening up possibilities we never would have seen otherwise. Something such as a Great Reset seems to be happening across the U.S. labor market. Workers are thinking about what they want from a post-pandemic job — and the answer for many seems to be something very different than what they had before. A Joblist poll of 13,000 job hunters found that more than half of all hospitality workers say they won’t go back to their old jobs and a third won’t even consider going back to the industry. They want better pay, better benefits and less physically demanding employment.

Of course, a survey of job seekers is going to be biased toward the workers who are unhappy at their old jobs. But there’s evidence of reticence in the broader job market, where service businesses are struggling to find enough workers to reopen — a problem even higher wages don’t seem to have entirely fixed.

Office workers are also having a rethink. After a year of Zoom meetings and two-minute commutes, many are reluctant to change out of their sweatpants and head back to the office. And some employers are getting ready to accommodate them. Ladders, a job-search site focused on positions paying more than $100,000 a year, says it has more openings for remote work than it does for jobs in any one city.

Many of the biggest tech firms seem to have decided on a hybrid model, with some fraction of the

workforce all-remote and most workers going into the office a few days a week. Many are facing complaints from workers pushing for more remote options. Even bankers, the kings of face time, are divided on the issue.

J.P. Morgan and Goldman Sachs are stressing five days a week in the office. But European banks are looking at hybrid models, and some U.S. banks are following suit: Citigroup will reportedly be going mostly hybrid, in the hopes of poaching recruits from less flexible competitors. If enough top talent is willing to trade the prestige of Goldman for the flexibility of Citigroup, even the starchiest banks may have to relax a bit.

One could see all this as the beginning of a great workplace revolution. The weak point of labor organizing is always coordination because a few workers who are willing to agree to terms can spoil things for everyone else. The pandemic may have provided a coordination mechanism by resetting expectations of what a “normal workplace” looks like — not just for office workers but also for frontline service employees, who can’t realistically work from home but who, flush with stimulus checks and extended unemployment benefits, are demanding something better than a dead-end, minimum-wage job to get them back into workplaces.

That’s one plausible story you could tell about the pandemic. But equally plausible is a story in which the post-pandemic normal looks very like pre-pandemic business as usual. Just as companies have to compete for workers, workers have to compete for jobs — or at least they will when the government turns off the emergency spending, as it will eventually have to, because we can’t keep borrowing 10 percent of gross domestic product indefinitely.

Before the pandemic, there were real reasons — beyond sheer callous indifference — that many service employers paid low wages and most office jobs wanted butts in seats. It all comes down to productivity: Is an employee’s labor earning enough for the business to justify her wage?

Hospitality work is an area where it’s not always easy to increase productivity — it still takes one maid to clean one hotel room. And many office employers believe that remote work is less productive in the long run, as collegiality wanes, corporate culture atrophies and collaborations lose the smooth pace of real-time interactions — not to mention the creative spark from face-to-face small talk.

The question is how much those concerns matter compared with the business benefits of a happier workforce. And the answer is, we’re about to find out.

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