Developed countries such as the United States and Europe, which are struggling with the logistics disruption caused by the aftermath of Corona 19, are suffering from severe manpower shortages. In the United States, about half of the state governments have eliminated unemployment benefits by the end of this summer, but the job shortage has not been resolved. In an American supermarket, there is a sign that says that they are looking for people. /AFP Yonhap News “/>
Developed countries such as the United States and Europe, which are struggling with the logistics disruption caused by the aftermath of Corona 19, are suffering from severe manpower shortages. In the United States, about half of the state governments have eliminated unemployment benefits by the end of this summer, but the job shortage has not been resolved. In an American supermarket, there is a sign that says that they are looking for people. /AFP Yonhap News
‘The Era of the Great Resignation.’ It is a new word that is shaking up the US and European economies. Developed countries that suffered a ‘Great Recession’ last year due to the spread of Corona 19 are struggling with a ‘retirement tsunami’ after a year. It is predicted that the economic recovery of advanced countries, which have been hampered by supply chain bottlenecks such as the logistics crisis, will be delayed due to the severe manpower shock.
According to the Organization for Economic Cooperation and Development (OECD) on the 26th, the number of workers aged 15 to 64 in the G7 countries decreased by 2.8% compared to just before the COVID-19 crisis. When expanded to eight countries, including Korea, the number of labor force reduced after the COVID-19 epidemic reached 10.45 million as of the second quarter of this year.
According to the Federal Bank of St. Louis, more than 3 million workers in the United States alone have chosen early retirement during the pandemic. It is interpreted that this is because health concerns have increased as the COVID-19 phobia spread, and the value of labor has fallen due to a surge in asset values such as stocks and houses. As of the third quarter of this year, 15.316 million Americans aged 15 to 64 were employed. About 2% of the total workforce left their jobs earlier than expected.
Photo = AFP Yonhap News
Even the pessimistic outlook that the era of ‘refusal to work’ has begun in earnest after the pandemic is raising its head. If worker churn goes on for a long time, the social insurance that supports the national system in developed countries is at risk of being hit directly. Most of its finances depend on the labor force.
When companies that have failed to secure workers raise wages in an attempt to find manpower, the aftermath spreads to consumer prices. If the price rises steeper than the improved pockets of wage workers, consumption is likely to decrease and the real economy as a whole is likely to contract.
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A restaurant in Bonn, Canada’s northern port city, removed its best-selling menu last month, calamari (fried squid) from its menu. This is because they cannot afford menus that require a lot of hands due to a lack of manpower. The British Pig Society said earlier this month that up to 120,000 pigs could be slaughtered without making it to the consumer table. It is also predicted that there will be no Christmas trees and turkey dishes this year.
The severe labor shortage is changing the year-end landscape of advanced countries. The return of people who have left their jobs due to the COVID-19 pandemic is delayed. Many are predicting that it will take more time to recover from a collapsed supply chain. The shortage of manpower that has spread to all fields from agricultural and livestock production to knowledge-based industries is threatening the global economy.
○As assets increase, labor supply decreases
As of the 25th (local time), the U.S. S&P 500 rose 98% compared to March 16, last year, when the impact of the coronavirus hit the stock market. During the same period, house prices (based on the Case-Shiller Index) jumped 23% and Bitcoin prices jumped 1074%. Asset values snowballed as money was printed to stimulate the economy.
As assets increased, the labor supply decreased. This is because the number of people choosing to retire has increased. According to Goldman Sachs, about 25% of the decline in the workforce is due to early retirement. Over the past year, US retirees accounted for 19.3% of the total population.
During the pandemic, countries have closed their borders to prevent the spread of COVID-19. As movement was restricted, migrants, who accounted for a significant portion of the labor force in developed countries, disappeared. In Australia, there was no one to shear the sheep, and in the United States, school bus drivers became rare. In the UK, where the effects of Brexit (the UK leaving the European Union) have been exacerbated, the shortage of truck drivers alone reached 100,000.
The number of people who are willing to work is greatly reduced. This is because the workplace has been transformed into a dangerous place where people may be infected with COVID-19. This is why restaurants where people meet frequently complain of the worst manpower shortage. In the U.S. alone, 6.8% of lodging and restaurant workers quit their jobs in August. twice the average (2.9%). The skill level of workers has also fallen due to the long pandemic vacuum. A serious background is the shortage of jobs for nurses and drivers.
○ Companies that raise wages
In order to find quality manpower, companies have entered into a ‘wage war’. Amazon last month raised the minimum wage for workers to $18 an hour. This is to save 12,500 employees for warehouse management and delivery. The labor cost that Amazon is expected to bear additionally in the fourth quarter of this year amounts to $4 billion (about 4.7 trillion won).
Chipotle Mexican Grill, which operates 2,900 U.S. branches, raised its employees an average of $2 an hour in May this year. The burden of labor costs led to a rise in prices. Consumer prices rose by 3.5-4%. In this month’s US Economic Trends Report Beige Book, the president of the Federal Bank of Philadelphia said, “A company recently offered $90,000 to a second-year certified public accountant who paid $65,000 before the spread of COVID-19.”
Concerns over inflation from an employment shock are growing. Striketober, a compound word of strike and October, is dominating the labor market as workers with elevated status continue to strike. David Solomon, CEO of Goldman Sachs, said, “The biggest concern for business people is wage inflation.
○“Robot/AI conversion will be accelerated”
Future prospects are mixed. Optimism that the economy will recover after the pandemic is over prevails, but the ‘crisis theory’ that structural problems accumulated over the years are beginning to emerge, is also supported. The economist, an economic weekly magazine, predicted that employment conditions would change depending on how long the risk of COVID-19 lasts. This means that workers will return to work once the chaos and fears created by the pandemic are resolved.
It is also predicted that more companies will be switching to automation systems such as robots. As world-renowned futurist Martin Ford wrote in the Guardian column, “Technology will not be able to provide answers to the problems facing employers right now.” This means that there are still limitations. However, he said, “After more than 10 years, artificial intelligence (AI) and robots will have a significant impact on the labor market,” he said.
Reporter Lee Ji-hyun bluesky@hankyung.com
