Labor Relations in a Post-COVID Economy: The Great Resignation through the Lens of Institutional Adjustment

Abstract

Using Foster’s theory of institutional adjustment, we examine how labor relations have changed during the COVID-19 pandemic. In this article, we argue that remote work technologies have generated new, instrumental methods of problem solving that were forced to become part of the institutional fabric during COVID-19. In doing so, the relationship between labor and employer has fundamentally changed, with workers gaining more control over the labor process in jobs that could be done remotely. As society has “emerged” from the COVID pandemic, we argue that much of the conflict regarding labor relations—such as “The Great Resignation”—are best understood as part of the process of institutional adjustment in which the gains from these new methods of problem solving have been concentrated in the hands of shareholders, with gains to labor either lagging or nonexistent. Our article then provides several paths for enterprises to take that solve this conflict in the context of progressive institutional adjustment—without eschewing the new remote work technologies that emerged during the pandemic.