ThinkTWENTY20

According to an article by Anneken Tappe on the CNN Business webpage, posted February 17, 2022, America's "Great Resignation" has transformed the workforce, leading to higher wages and better conditions for many. It has also left a mark on the nation's high rate of inflation.
But as the "Great Return" beckons for employees who have spent months working from home, their attitude to in-person work, pay and job switching may have undergone a similar metamorphosis.

Tappe notes that Prospects of better pay or benefits (or both) have motivated many workers to look around. “The number of workers quitting their jobs hit a record high in November last year. All these workers applying for different jobs has incited wage competition between companies, pushing salaries up. And, in turn, those higher wages have pushed inflation even higher, with the "Great Resignation" contributing around one percentage point to last year's inflation rate, according to a new report from the Federal Reserve Bank of Chicago.”

In December, the Fed's preferred measure of inflation – the personal consumption expenditure price index – rose 5.8% from the year before. Tappe says this was the biggest jump since 1982.
Meanwhile, the nation has far more available jobs than workers to fill them. As of December, there were nearly 11 million job openings, or 58 unemployed workers for every 100 positions, according to ZipRecruiter.

As more people look for new jobs while they are already employed, negotiated wages go up, according to the Chicago Fed, which fuels wage inflation, and to some extent overall inflation.

It is impossible to say whether wage pressures and high job mobility will persist throughout 2022 and beyond the pandemic, the Chicago Fed economists said. For now, the jury is still out.
Julia Pollak, chief economist at ZipRecruiter, predicts that many people who are required to return to the office full-time will leave for jobs with greater flexibility.

"March 1 is the new return-to-office date for many companies. Those that are requiring employees to come back to the office five days a week are experiencing a bigger backlash than they had anticipated — so much so that the Great Resignation could accelerate in the coming months," Pollak told CNN Business in an email.

Ultimately, says Tappe, “the market will determine what it takes for companies to win in the war for talent in midst of a labor shortage.”

For Tappe’s complete article, see https://edition.cnn.com/2022/02/17/economy/return-to-office-wages-inflation/index.htm.