In the month of April 2021, some 4 million workers in the United States quit their jobs, sparking the phenomenon known as the Great Resignation. Borrowing from the phraseology of the Great Depression and Great Recession, this year’s disruption is also called the Big Quit – as resignation rates, or ‘quit’ rates exceeded their normal values across almost every industry and all over the world.
Disruptions in work caused by major world events have become a recurring thing, and this year’s ongoing paradigm shift is just one of several in humankind’s history. In this article, we’ll discuss exactly eleven such events – and how they’ve changed the world of work forever.
1. Ordinances of King Philip II (1593)
When did the eight-hour workday become a thing? Before I searched that exact question on Google, my assumption was that it was the Ford Company that started it all. It turns out that the eight-hour workday traces its origins back to the 16th century, predating the establishment of the United States of America itself!
In 1593, King Philip II of Spain established an eight-hour workday by his edict called Ordenanzas de Felipe II. It was the 6th of the ordinances that mandated this:
“Sixth title. From factories and fortifications.
Law VI That the workers work eight hours a day distributed as appropriate.
All the workers will work eight hours a day, four in the morning, and four in the afternoon…”
His intention was to “ensure their (workers’) health and conservation.” Thus, was born the eight-hour workday rule which, although has seen modifications and adjustments throughout the years, remains the rule today. I could only imagine what work was like before this concept existed. Work must have been a lot like agriculture – from sunrise to sundown.
2. First Minimum Wage Law (1894)
The International Labor Organization (ILO) says that the purpose of having a minimum wage is to protect workers against unduly low pay as well as to help people overcome poverty and reduce inequality, and of course, to promote the right to “equal renumeration for work of equal value.” ‘Equal pay for equal work’ turns from concept into legislation.
When the first ever minimum wage law was enacted by New Zealand in 1894 through the Industrial Conciliation and Arbitration Act, it would spearhead other countries in mandating their own – Australia in 1896 via the Factories and Shops Act, the United Kingdom in 1909, and the United States belatedly in 1938 after several years of being challenged in state courts.
It’s worth noting that there continue to be countries without a minimum wage legislation, such as Sweden, Denmark, and Iceland. That said, the enactment of minimum wage laws was an important disruption that was in favor of workers. It led to pay stability, fairness, and gave workers more negotiating power.
3. Fordism (1903)
The Ford Company was founded in 1903, but Fordism gained prominence in 1934 when it was used by Antonio Gramsci in his essay, “Americanism and Fordism.” Rather than having an exact definition, the term is more of a characterization of work where a manufacturing system is designed to spew out standardized, low-cost goods while affording workers decent wages to buy them. There were three main principles of Fordism according to a book by Tolliday and Zeitlin, the third of which was that:
“Workers are paid higher living wages so that they can afford to purchase the products they make.”
Bringing this third principle into today’s landscape, can workers around the world really say they can afford the products they make? Workers in China who assemble iPhones in factories are paid 330 USD a month, while a single brand-new iPhone these days costs 800 USD. Fordism was radical in its time, and perhaps we do see some of that in the tech industry today where employees for billion-dollar companies are also paid six-figure salaries.
4. Adamson Act (1916)
In 1817, Robert Owen encapsulated the goal of the eight-hour workday in his slogan:
“Eight hours labour, Eight hours recreation, Eight hours rest.”
The Adamson Act of 1916 was signed into law in order to prevent a nationwide strike among railroad employees in the United States.
Why was this a significant point in time for the world of work?
Because it also established additional pay for overtime work. Having established the threshold, extending the work hours of an employee would disincentivize employers by making them pay more. It would also encourage more hiring, and evenly dividing a 24-hour work cycle into three 8-hour shifts. While it only applied to railroad workers, this was also the first ever federal law that regulated the hours of work in the private sector. And it would ultimately pave the way for the enactment of the Fair Labor Standards Act by the year 1938.
5. Great Depression (1929)
While the first four big historical events were beneficial to workers, what happened during the Great Depression was obviously not. It’s estimated that 15 million Americans were left jobless, and by 1932, nearly one in four were out of a job.
The unemployment rate borne out by the pandemic last year reached 14.7 percent in April 2020 – compare that with an unemployment rate of 25 percent. And of those who were lucky enough to have jobs during the Great Depression, many experienced reduced working hours. The good part though, was that year after year since 1933, the unemployment rate kept dropping, eventually back to single digits by 1941 (9.9%) and less than half that a year later (4.7%). By 1944, unemployment rate got to an all-time low of 1.2 percent.
6. Strike Wave (1945-46)
Despite unemployment being at their lowest levels after World War II, the Strike Wave of 1945-46 disrupted the labor industry in the United States. It was a massive series of strikes across several industries. These were the largest strikes in American labor history, with more than 5 million workers involved in strikes.
It was initially believed that these strikes were for better pay and working hours, however, a study by Scott and Homans revealed that only 4 out of 118 strikes were related to these. Instead, the strikes were mainly for discipline, company policies, or firings. Generally speaking, the strikes were because of postwar adjustments where there several million soldiers were returning home and a large transfer of workers from wartime sectors to traditional sectors occurred.
7. Service Economy (1968)
This was much less a disruption, and more of being a trend in how employers ran their business. When did the world’s economy start leaning towards providing services, as opposed to being focused on manufacturing or agriculture? 1968 is not an exact date, as it was simply the year the economist Victor Fuchs published his paper The Service Economy. In today’s Fortune 500 list, there are certainly already more service companies and fewer manufacturers than in previous decades.
The shift made by companies from being mere providers of products – hardware, infrastructure, licensable intellectual property – into services-led businesses, is a shift that is still going on until today. The trend of companies shifting into a “Software-as-a-Service” (SaaS) business model has further supported the idea of the Service Economy, creating ongoing relationships between customer and provider.
8. Outsourcing (1989)
Outsourcing was also more of a paradigm shift in how businesses operated, rather than being a disruption. Outsourcing as a concept explained by management consultant Peter Drucker in 1989 in his Wall Street Journal article “Sell the Mailroom” had already been widely adopted by businesses several years before. It was called outside resourcing back in 1981.
Motivated to cut costs and at the same time drive focus on its ‘core business’, companies started contracting out none-core functions such as payroll processing, facility management, and call center support. And because of globalization, companies were then able to outsource whatever they could to countries with cheap labor costs.
Was this ultimately bad for the people working at the company’s country of origin? Cutting costs was a primary motivation for companies to outsource, and so until today, they continue to look for non-core functions they can have workers in India or the Philippines do for them, as opposed to paying workers in their country who cost as much as ten times more for the same work.
9. Great Recession (2008)
I’ve written a little bit about just how many jobs were lost during the Great Recession. You know a significant disruption when years later, several books, movies, and documentaries are made about it in just a short span of time. The film The Big Short comes to mind, showing just how fragile the economy can be.
The Great Recession showed that even the biggest companies, even those we trust the most (the big investment banks) are still able to fail when left unchecked. It’s easy to blame the consumers for not being able to pay their mortgages, but it’s pretty much consensus that the banks who allowed such a disaster to happen were the culprit.
Perhaps the first major economic disruption of the new millennium, the Great Recession displaced workers, made everyone rethink their finances, dampened consumption (for a little while) and was perhaps an indicator that job security was already an extinct concept – as long-established companies started laying people off.
10. Covid-19 Pandemic (2020)
The pandemic disrupted work not just in terms of the millions of jobs lost similar to the Great Depression and the Great Recession – but also in how people thought about work, in general. When the pandemic began, most of the labor force was already in the position to take their home with them, due to the advancement of information technology systems, enabling productivity wherever the worker might be.
The lockdowns, layoffs, and the long wait to return to offices made workers rethink their entire careers – perhaps ushering in the Great Resignation which ultimately followed when things started opening back up.
11. Great Resignation (2021)
You could argue that the Great Resignation is just a part, an unfolding chapter of the Covid-19 pandemic, however, you could also say that this latest major labor disruption can be considered separately – and that it was the Covid-19 pandemic that simply caused things to accelerate, or ‘light the fuse.’ Because first of all, before the pandemic workers already felt that they should be treated better, and some industries were obviously friendlier to workers than others were.
Second of all, the pandemic provided workers a period of contemplation, whether they were inside their workplaces or at home. For example, workers in Amazon warehouses eventually realized that they should probably support the movement to unionize, due to unsafe working conditions during the pandemic. And at home, laid off workers from the hospitality industry probably never wanted to return to their old jobs anymore, seeing how fragile their economic status was once the lockdowns began last year.
As of this writing, the Big Quit is still unfolding, and who knows where this will all lead. Might it lead to the re-emergence of unions all around the world? Might it permanently eradicate mandatory work-from-office policies for some industries? We’re in standby mode for now.
Where is Work heading?
The world of work is currently undergoing a massive transformation. Work during the pandemic put into the spotlight key workplace issues such as overwork, burnout, safety, and flexibility. Where might all of this be heading? It’s too early to know. Companies even have trouble trying to define what a hybrid workplace looks like. We are currently living in a time of major work disruption, and it might be a perfect time to take down notes.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.