The Great Resignation isn’t so simple. What does the future of work look like in Massachusetts?

The workplace has changed a lot over the last two years. For some folks, the pandemic has meant Zoom calls. But as mask mandates have lifted and COVID-19 cases seemingly ease up, what does the future of work look like?

Dr. Mark Melnik, director of economic and public policy research at the UMass Donahue Institute, joined GBH’s All Things Considered on Friday to talk about how labor has changed — and what was behind the changes the nation has already seen. (And, in a reminder of how much things of changed, host Arun Rath conducted the interview from his home recording studio — what was once a closet in his basement.) What follows is a lightly edited transcript.

Arun Rath: Dr. Melnik, hello.

Dr. Mark Melnik: Hi. Thanks for having me.

Rath: So first off, let's talk about the shortage of workers that we're hearing so much about right now. I get the sense that if we look at it with more scrutiny, it's more complicated than just saying there's a shortage of people who want to work. Can you give us a sense of what's really going on?

Melnik: Sure. It's certainly more complicated than I think some of the anecdotal stories that we would hear sometimes in the media about, as you said, people not wanting to work. I mean, there is definitely a worker shortage as we look at the economy in the aggregate, and there's a number of factors that go into that.

So first off, we were living through a global pandemic. And what we saw was an actual increase in overall death rate in Massachusetts compared to other points in time. In fact, this most recent year — 2021 — was the first time in recorded history that Massachusetts had more deaths than births in the year. And that is obviously a function, in part, to increase the levels of illness in the community in general. So, there's this issue of having just less working-age people in that regard.

The second issue, which was significant, is that in Massachusetts since 1990, 80 percent of the labor force growth in Massachusetts is due to increases in immigrant labor in the state. Well, the pandemic obviously limited the amount that people can move freely around the globe. We saw net international migration decrease dramatically in 2020 and 2021 — and a couple of years previous to that, international migration was already coming down, in part due to some tougher restrictions from the Trump administration. But our reliance on international labor has been such a critical part of labor force growth in Massachusetts, and we just had less immigrants coming into the country and into the state over the last couple of years.

We also saw increases in retirement. And this was something that labor economists have been pointing to for a while, that as baby boomers reached retirement ages, we would run the risk of having a deficiency in the number of workers available to employers. What we found in the COVID crisis was that a lot of folks who were maybe approaching retirement ages already said, “You know what, I'm just going to retire now” — especially with the question marks about how people with compromised immune systems or whatever. But we did see an increase in the total number of retirement.

And then lastly, the economic downturn associated with COVID was highly unequal. The initial shocks in the economy were felt all over, but as the recession really took hold, the impacts were most acutely felt in segments of the economy that required limited educational attainment and tended to be lower-wage sectors. Conversely, the parts of the economy that have grown the most during the recession have been things that were more in our knowledge, based in high-tech sectors of the state. So the reserve army of labor who is available to work isn't necessarily well aligned with the job opportunities that presented themselves through much of the pandemic.

And so, in short, increased retirements, less immigrants. The folks who are available are folks who tend to have limited educational attainment relative to jobs that are growing. And that through a global pandemic, we saw an increase in deaths.

Rath: And you mentioned with the retirements, that seem to be including a fair number of people who are using retirement as kind of an opt-out. They were retiring, in some cases, early. We've also heard so much about what's being called the Great Resignation — we've called it, in a series here, the Big Quit — where people are not necessarily even just quitting their jobs but doing something entirely different. Can you talk a little bit about that, that slice of people and what's going on there?

Melnik: Sure. So the first one on the retirement side, yet there's definitely a potential for an opt-out. And you could see scenarios where folks who, either they had maybe they had compromised immune systems or the stress of what all working meant in a pandemic, and saying, “You know what, I'm fine now. This isn't enjoyable for me. I'm going to choose to retire.” Or, “It's unsafe for me, I'm going to choose to retire a little earlier than maybe I would have planned to otherwise.”

On the Great Resignation, I think there's a lot of interesting things that are taking place there. I mean, on the one hand, the Great Resignation is a little overstated in some ways. I more refer to it as “the Great Job Change.” There are some folks who were permanently leaving the labor force, but a lot of what we're seeing is more folks moving around among positions. The people are quitting, but they're not quitting the economy, they're quitting their current job, right? And what we've seen that's been, on some level, a positive thing is that wages increasing, particularly for folks of lower-wage sectors.

So there's being a certain level of empowerment for workers who maybe want more flexibility in work or higher wages or something to that effect. And I think that's embedded in what we're seeing in some parts of the Great Resignation. And we've seen a lot of the quit rate, in particular in low-wage sectors, going up. We don't have a great data on that in Massachusetts yet, but nationally that holds, and we wouldn't expect it to be much different in Mass.

Now, I do think there are also other cultural things that may be taking place here as well, people kind of rethinking about their relationship to work and maybe choosing to do things that aren't traditional labor market activities that get counted in the Bureau of Labor Statistics. I'm thinking about gig-economy type of stuff. And this is just anecdotal, but I have a family member who had been working as a cook for years but had been doing art as a hobby and decided to throw themselves full time into their art, saying, “You know what? I was poor working in the kitchen, I could be poor selling art.” And I think that's kind of an interesting thing, too. You know, I don't have a lot of great data on that particular thing, but we hear a lot of stories around this kind of cultural shift in relationship to work. And I think that's something to continue to track.

But I think the biggest part of the story is a certain level of empowerment for lower-wage workers to be able to say, “These conditions are not ideal for me, and I want to pivot into something that maybe fits a bit better.” Now the biggest problem is that even with rising wages, it's not keeping up with what we're seeing in inflation, which creates a whole bevy of challenges for low- and moderate-income households around the country.

Rath: Dr. Melnick, this is so interesting and really helpful to be able to talk about this in this kind of detail. Thank you so much.

Melnik: No problem. Happy to do it.

Rath: That's Dr. Mark Melnik, director of economic and public policy research at the UMass Donahue Institute. This is GBH’s All Things Considered.