The United States is celebrating Labor Day this Monday amid an unexpected economic situation in which workers’ shortages and doubts about a return to office due to the persistent threat of the coronavirus pandemic are coming together.
Despite the gradual revival of the economy as vaccination progresses in the country, with more than 63% of the adult population in the US with the full pattern, economists are surprised that it is not accompanied by a rebound in job generation.
“Perhaps the most important fact is the decline in the number of people in the workforce who want a job and it has gone down from 6.5 million in July to 5.7 million in August,” said Professor Betsy Stevenson of Economics and Public Policy at the University of Michigan, on his Twitter account last Friday.
Federal Reserve (Fed) forecasts 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 NORMALITY
Last week saw the release of unemployment data for August, which showed a drop in the rate to 5.2%, compared to 5.4% in July, but with a still weak creation of new jobs. of work.
In August, the economy added 235,000 jobs, compared to the million jobs added in July, the lowest figure in seven months.
Part of the responsibility for this slowdown lies in the expansion of the covid-19 delta variant, but there are also deeper factors that are causing employees to rethink their return to the old normal.
THE DILEMMA OF RETURNING TO THE OFFICE
A survey by the research group The Conference Board on job satisfaction published in the last week indicated that 42% of respondents in August expressed concern about returning to office for the danger of becoming infected. of 24% last month.
Likewise, 80% of those who claimed to be looking for work 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 it comes to facing this uncertain picture.
Many companies, such as Google or Apple, have postponed their plans back to the office; while others, such as investment banks Morgan Stanley or JP Morgan, have demanded their workers return to their jobs.
“Let there be no doubt 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,” he said. its president, James Gorman, in early summer.
Others, such as the fast food chain Chipotle, have acknowledged that they have been forced to raise wages to attract workers.
GOODBYE TO BENEFITS
However, many unemployed people may be forced to look for work after three federal aid programs expired on Monday, affecting more than seven million people who will not receive a single benefit.
The three programs were launched about 18 months ago, after Congress approved the $ 2 trillion stimulus package at the start of the pandemic, and were extended last December and March, but they are not expected to be expanded once again.
Under one of these programs, $ 300 a week has been allocated to the unemployed since last December; a grant that reached $ 600 a week between April and July 2020.
The other, Pandemic Unemployment Assistance, provided assistance to freelancers and independent contractors, among others; and the last was the Pandemic Unemployment Emergency Compensation Program, which extended the benefit to those people who had exhausted their state allowance.
THE FAITH, WAITING
Labor market data could affect the decisions of the US central bank, which, after huge stimulus approved to alleviate the pandemic, has acknowledged 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 at $ 120 billion in response to the economic impact of the pandemic of the covid- 19.
Its president, Jerome Powell, stressed on Aug. 27 that “if the economy evolves as anticipated, it would be appropriate to start slowing the pace of asset purchases this year.”
However, the doubts of an economy that is not moving forward as anticipated may force the Fed to opt for caution and wait for clearer signals to start withdrawing monetary support.