It’s not often that economies face the disruptions we’ve experienced over the past year, and none of us should be surprised that it takes time for the labor market to stabilize.
But some wonder if the Covid is triggering a historic rebalancing of powers between bosses and workers.
No one in their right mind would compare Covid to the Black Death, which wiped out enough labor in the 14th century that peasant labor was scarce, with the result that farm wages rose by several dozen per cent. hundred over the following years. years. Covid certainly hasn’t disrupted employment in such a direct way.
But pandemics can accelerate social and economic change. In particular, over the past year, Covid has prompted many foreign workers in the UK to return home to sit down. We cannot be sure that all will choose to return.
Anna Janczuk, founder of a large Polish community organization in Ealing, west London, told me that most of her close friends had returned to Poland: “What they appreciate is the close contact. with their families. They reassessed their choices and priorities. “
Add Brexit to the equation, and the old assumption that companies can just hire additional people from Eastern Europe to fill in the gaps can no longer be taken for granted.
Jobs in the suburbs
For the record, Covid has also led more than one to think about what matters to them and take early retirement or quit their job to start their own business. Economic “inactivity” increased during the pandemic, as highlighted by data from the Office for National Statistics.
These are all developments that make life harder for employers, who would therefore expect to pay more to find the workers they need – not just for the pandemic, not for the pingemic, but forever.
James Reed, chairman of Reed, one of the UK’s largest recruiting sites, told Radio 4’s PM program that hotel and restaurant jobs pay increased by 18% on advertised jobs on their sites and 14% for all jobs paying £ 25,000. or less.
No wonder people have suggested that in a post-Brexit, post-Covid world, the power of workers is back.
However, there is another theory as to what happened: that we are simply in a temporary post-pandemic rut and normal service will resume before long. As a result, we have not yet recovered from the key that Covid threw into the day-to-day functioning of our labor market.
The argument goes: The pandemic has pulled the rug out from under some types of business, while increasing demand elsewhere. This has shifted the demand for jobs in retail to online shopping and delivery, for example; he took jobs in the downtown sandwich shops and moved them to the suburbs where you find people working from home.
According to Baroness Minouche Shafik, former Deputy Governor of the Bank of England, it was evidence of a K-shaped recovery.
“Some sectors are growing rapidly and need to employ people – other sectors are in decline and are unlikely to rehire people they may have lost during the pandemic,” she said. “The leave kept people in their current jobs instead of allowing people to move to where they would be in the future.”
While unusually large changes have taken place in the way people work, it’s easy to believe the leave put the job market on hold for much of the past year. The normal cogs that turn dying jobs into new ones were thrown into a sticky syrup that slowed everything down.
In a typical year, you might expect to around one in ten workers change jobs, and many more for those under 30.
Who knows how many people who could have moved felt that in 2020 it was better to sit still in a job – even with only 80% of regular pay in the retention program – than to risk it and move elsewhere?
If this count is right, it implies that there will be shortages in the growing sectors, which cannot get the staff, while the workers bide their time before moving on.
Right now, I think it makes sense to assume that this is what is happening: unless there is a big permanent change in migration, we are simply in the pain of a emerging from the pandemic right now, rather than a historic pivot to work.
The example of Covid disruption that struck me the most was when I visited the transport company Youngs Transportation and Logistics, in Purfleet, Essex, where I spoke to manager Rob Hollyman about the driver shortage of heavyweight.
He told me that there had been a shortage of drivers for a long time. But right now, while it only takes two weeks to train, there is a backlog of testing windows caused by Covid. So even if someone wanted to get the permit, they would have to wait.
We might still find that there is a permanent fallout from the pandemic – there may even be a shift in the political climate around wages and terms.
But all we know now is that it’s a chaotic old era as workers and employers find their feet.