Workers Win When They're Scarce. They Always Have. Why Does This Keep Catching Everyone Off Guard?

In 2021, economists, business journalists, and a remarkable number of corporate executives spent several months being publicly baffled by the fact that workers were quitting jobs, demanding higher wages, and turning down offers they would have accepted two years earlier. The phenomenon got a name—the Great Resignation—and generated an enormous volume of analysis treating it as something genuinely new.

It was not genuinely new. It was, in fact, one of the oldest and most well-documented patterns in labor economics. When the supply of workers drops suddenly, the price of labor goes up and workers gain negotiating leverage they didn't previously have. This has happened after every major population shock in recorded history. The surprise isn't that it happened. The surprise is that anyone was surprised.

The Black Death Made Peasants Wealthy

The most dramatic example in Western history is also the most instructive. The Black Death killed somewhere between a third and half of Europe's population between 1347 and 1351. The demographic shock was staggering. And within a generation, the survivors—particularly agricultural laborers—were earning significantly more, eating better, and in many regions working under fundamentally different terms than their parents had.

The feudal system was already under stress before the plague, but the labor shortage that followed accelerated its unraveling in ways that centuries of peasant resistance hadn't managed. Lords who had previously dictated wages, restricted movement, and extracted labor through obligation suddenly found themselves competing for workers. Peasants who survived could walk to a neighboring manor and get better terms. Some did. Enough did that the entire wage structure shifted.

The English Statute of Laborers in 1351 tried to freeze wages at pre-plague levels and prevent workers from leaving their home manors. It was one of the first recorded attempts by a government to suppress wage growth driven by labor scarcity. It failed. Not completely, and not immediately, but wages kept rising anyway because no law can override the arithmetic of too few workers and too much work.

The plague didn't end feudalism—that's an oversimplification. But the labor shortage it created gave workers leverage they had never held before, and that leverage translated into concrete, measurable improvements in material conditions. The historical record on this is not ambiguous.

This Isn't Unique to Medieval Europe

The pattern shows up across wildly different contexts, which is part of what makes it so reliable as a historical signal.

After the Antonine Plague in the Roman Empire (roughly 165-180 CE), labor costs in agriculture rose across affected provinces. Roman landowners complained in correspondence about the difficulty of retaining workers and the wages they were being forced to pay. The complaints read like a modern op-ed about labor market tightness.

In colonial America, chronic labor scarcity was one of the defining features of the early economy. Wages in the colonies consistently ran higher than in England for comparable work throughout the 17th and 18th centuries—not because colonial employers were generous, but because workers had options and the option to leave for land of their own was always available. Indentured servitude and eventually chattel slavery were, among other things, attempts to create a labor supply that couldn't exercise market leverage. The brutality of those systems is inseparable from the economic problem they were designed to solve.

The labor shortages of World War II brought women into industrial jobs at wages and in roles that had been formally closed to them. When the war ended, enormous institutional effort went into reversing those gains—not because women were less productive, but because returning male workers needed the labor market conditions to revert. The reversion was only partial. Some of what women gained in those years persisted.

Why Employers and Policymakers Keep Forgetting

If this pattern is so consistent, why does it keep catching the people on the other side of it off guard?

Part of the answer is that labor markets are tight for short periods and loose for long ones. Most of the time, in most of recorded history, there have been more workers than jobs. The conditions under which workers hold genuine leverage—pandemic mortality, rapid economic expansion, demographic collapse, mass migration out of a labor pool—are exceptional. The normal state is employer advantage, and the people who run businesses and governments spend most of their careers operating in that normal state.

When the exception arrives, it genuinely feels anomalous because it is anomalous. The mistake is treating 'anomalous' as synonymous with 'temporary' and assuming the reversion to normal is both automatic and imminent. Sometimes it is. Sometimes it isn't. And the people making that assumption are usually the ones with the most to gain from the reversion happening quickly.

There's also a selection effect in who writes economic analysis. The voices most frequently quoted in coverage of labor market tightness tend to be employers, investors, and the economists who advise them. Those groups have a structural interest in framing worker leverage as a problem to be solved rather than a market signal to be read accurately. This doesn't make them dishonest—it makes them human. But it does mean the framing of labor scarcity as a crisis tends to dominate over the framing of it as a correction.

What the Historical Record Says About Where We Are

The post-COVID labor market tightness has been unwinding, and by most measures the balance of power has shifted back toward employers faster than the post-plague shift did. Wage growth has slowed. Quit rates have normalized. The JOLTS data looks more like 2018 than 2021.

But the underlying demographic pressures haven't disappeared. The US labor force growth rate is slowing. Baby Boomers are exiting the workforce faster than younger cohorts are entering. Immigration policy is tightening in ways that historically reduce labor supply in sectors that depend on it. AI and automation may offset some of this, but the timing and distribution of those effects are genuinely uncertain.

The historical pattern doesn't tell us that workers are about to gain another round of leverage—it doesn't work as a precise forecasting tool. What it does tell us is that the conditions that produce worker leverage are structural and demographic, not psychological. They don't require workers to be more militant or employers to be more generous. They require the arithmetic to shift.

When it does, the surprise will be exactly as genuine as it always is—which is to say, not at all. The notebook is right there. It's been right there for five thousand years.