As vaccination rates among younger cohorts accelerate this issue should ease. Plus, these sectors disproportionately employ younger workers, who may be more reluctant to return to crowded workplaces before they’ve been vaccinated. To some degree it’s a transitory issue due to sudden reopening and the time and admin required to fill vacancies (known by economists as ‘frictional’ unemployment). There are no fewer potential workers than there were before the pandemic, so this is a bit of a puzzle. Surprisingly this hasn’t made much difference to this recruitment drive. Others are offering sign-on bonuses and rewards for referrals with varying degrees of success. One McDonald’s restaurant in Florida is offering $50 to those who turn up to job interviews. Businesses that have been essentially shut for the last year have struggled to accommodate the sudden rush of demand, especially as remaining Covid-19 measures like table service and extra cleaning increase labour intensity.Īs vacancies go unfilled, companies are resorting to unusual methods to attract workers. The below chart shows just how much additional saving households managed to squirrel away in 2020 compared to 2019.Ĭonsumers have been particularly keen to splurge on leisure and experiences to make up for lost time and revive their stagnant social lives. The lifting of lockdown has resulted in surging consumer spending, as re - opening excitement coincided with strong household balance sheets after a year of forced saving. In the US, almost half of American companies are finding it difficult to fill one or more jobs (see chart below). It’s a similar story in the UK where firms also report they’re struggling to fill vacancies. You could be forgiven, then, for thinking there’d be a mad scramble for jobs when global economies perked up and the High Street reopened. But what we’re actually seeing is a labour shortage in some areas of the market, which is pushing up wages. These sectors were particularly hard hit by lockdowns, forced closures and plummeting tourism. Women and younger workers were badly affected. The worst affected industries were accommodation and food services where global employment declined by over 20%, followed by retail. Even more saw their working hours and wages cut. More than 114 million people lost their jobs over 2020, according to the International Labor Organization.
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