The ‘Great Resignation’ Was Always An Obnoxious Myth

Compensation in the United States is very good. How you know this without knowing it is that most of the best, most valuable businesses in the world are American.

It brings to mind the popular narrative in 2021-22 about the “great resignation,” and how employees had gained the upper hand over their employers as they voluntarily quit in high numbers. Nowadays, the reverse is supposedly revealing itself as U.S. businesses allegedly take back the “hand” they’d briefly lost.

It’s no doubt fun to imagine a constant, see-sawing battle between labor and ownership, but that’s just it. It’s all imaginary. Where businesses are great, so is the relationship between labor and ownership.

That is so because good businesses become great not by stiffing their employees. In an economy as dynamic as ours, it’s way too expensive to have unhappy, underpaid workers. Having the upper hand over employees, and worse, using it, is the path to mediocrity. And American businesses aren’t mediocre.

“Even the dishwasher is crucial here.” Who said that latter? No less than Andre Soltner, the recently passed chef and owner of the legendary Lutece. At its height, Zagat rated New York City-based Lutece as the U.S.’s best restaurant for six straight years.

In Soltner’s obituary in the Washington Post, Bridget Reed Morawski noted that the perfectionist in Soltner “cultivated an enthusiastic staff, paying everyone from the maître d’ to the bartender above New York City’s minimum wage to keep talent.” Well, of course he did.

It all speaks to the wholly superfluous nature of the “minimum wage” in a country like the United States. Members of the left emote that the wage floors are necessary lest business owners underpay, while members of the right barely improve on the droolings of the left with their own nonsensical droolings about how high wage floors will cause businesses to fire workers, automate or both.

More realistically, business owners strive to overpay their employees. They don’t fire the highest compensated employees, but they do let go the ones who don’t rate princely compensation. They’re all like Soltner was. Exactly because the business owners aren’t wasteful, they hire individuals crucial to the success of their business, and since their employees are crucial (right on down to the dishwasher in the case of Lutece), they go out of their way to make it too expensive for the best and brightest to quit. Why? Readers already know: It’s way too expensive for the very good and great to exit.

The “Great Resignation” narrative implied a fabulist view of the American workplace defined by unhappy, undercompensated employees “quietly quitting” ahead of actual resignation as a reflection of their unhappiness. But for one problem: the view was false, illusory, or both. Evidence supporting the previous claim can be found in the valuation of U.S. companies; the latter a market-based Zagat arrived at by investors feverishly looking for the best corporations that by extension are staffed with the best talent.

Looking ahead, readers can rest assured that if the talent ever begins to depart world-leading U.S. companies, it will show up in falling share prices ahead of the outmigration. There was never a “Great Resignation” simply because American employees are too valuable to their even more highly-valued businesses.

Author

  • John Tamny

    John Tamny is a popular speaker and author in the U.S. and around the world. His speech topics include "Government Barriers to Economic Growth," "Why Washington and Wall Street are Better Off Living Apart," and more.

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