US celebrates Labor Day amid unprecedented employee shortage

US celebrates Labor Day amid unprecedented employee shortage
The US celebrates Labor Day on September 6.

The United States celebrates Labor Day this Monday amid an unexpected economic situation in which the shortage of workers converge and doubts about returning to the office due to the persistent threat of the coronavirus pandemic.

Despite the progressive reactivation of the economy as vaccination advances in the country, with more than 63% of the adult population in the United States on the full schedule, economists are surprised that it is not accompanied by a rebound in the employment generation.

“Perhaps the most important data is the decrease in the number of people in the workforce who want a job and that has fallen from 6.5 million in July to 5.7 million in August,” said Betsy Stevenson, professor of Economics and Public Policy at the University. from Michigan, on his Twitter account last Friday.

Forecasts by the Federal Reserve (Fed) point to economic growth in the country of 7%, which would be the highest annual rate since the 1980s.

However, economic indicators such as employment show a more complex scenario.

The labor market, far from normal

Last week the unemployment data for August was released, which showed a decrease in the rate to 5.2%, compared to 5.4% in July, but with a still weak creation of new jobs.

In August, the economy added 235,000 jobs, compared to 1 million jobs added in July, in what is the lowest figure in seven months.

Part of the responsibility for this slowdown corresponds to the expansion of the delta variant of covid-19, but there are also deeper factors that are making employees rethink the return to the old normality.

The back-to-office dilemma

A survey by The Conference Board research group on job satisfaction published in the last week indicated that 42% of those consulted in August expressed concern about returning to the office due to the danger of being infected, compared to 24% last month .

Likewise, 80% of those who said they were looking for a job considered that the policy regarding flexibility on working conditions was very or moderately important when deciding on a job offer.

Large corporations are divided when facing this uncertain panorama.

Numerous companies, such as Google or Apple have postponed their plans to return to the office; while others, such as investment banks Morgan Stanley or JP Morgan, have required their workers to return to their jobs.

“Let there be no doubts about it. We do our work in the Morgan Stanley offices, that’s where we teach, that’s where our fellows learn, that’s how we make people develop, ”said its president, James Gorman, at the beginning of the summer.

Others, like the fast food chain Chipotle, have acknowledged that they have been forced to raise wages to attract employees.

The Fed, waiting

The labor market data could affect the decisions of the US central bank, which, after the enormous stimuli approved to alleviate the pandemic, has recognized that it is now considering a change of direction in its monetary policy.

The Fed has kept interest rates in the range of 0% to 0.25% since March 2020 and monthly bond purchases of $ 120 billion in response to the economic impact of the covid-19 pandemic.

Its president, Jerome Powell, stressed on August 27 that “if the economy evolves as anticipated, it would be appropriate to start reducing the pace of asset purchases this year.”

However, the doubts of an economy that does not progress as anticipated may force the Fed to choose prudence and wait for clearer signals to initiate the withdrawal of monetary support.

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