Labour market shortages that occurred because of covid!

COVID 19 has affected every sector of life and changes the way of living. The pre-COVID 19 world was completely different from what the world looks. This virus gas changed the method of conducting businesses, the future direction of entrepreneurs, living, education, and almost every human activity. The nationwide lockdowns across the world have reduced global GDP by 3% in the year 2020. It is not only a pandemic and public health crisis; it has also severely affected the global economy and financial markets bringing people below the Poverty line. Significant rise in unemployment, reduction in per capita income, and a large labour shortage are the main consequences of the Corona virus.

Most governments in the world underestimated the risks of rapid COVID-19 spread were mostly reactive in their crisis response. Resultantly, the virus spread more rapidly than was expected – causing big financial and health crises. It has brought both the developed and developing economies to their knees such as United States, India, and Italy. A large number of deaths has created a fear of viruses in people. This fear is one of the major reasons for the labour shortage in the world despite unemployment.

According to Nancy Vanden Houten, a lead economist at Oxford Economics, there’s no guarantee that the people who have lost their jobs permanently lost will be able to find work elsewhere but, at the same time, there’s a risk that labour force participation won’t return to what it was before the pandemic. We might still experience shortages of workers. The lack of seasonal workers from abroad due to travel restrictions is also one of the prime reasons for the labour shortage in the Covid 19.

Because of the Corona virus, the labour shortage has a large impact on businesses. The Bureau of Labour Statistics found that 9.7 million Americans are actively seeking work however, businesses are reporting significant labour shortages.

The restaurants and especially services sectors are facing a labour shortage. According to the National Restaurant Association of America, the staffing at full-service restaurants has declined to 20%, and services sectors are struggling to hire a labour force.

The Wall Street Journal has reported that fear is the main driver behind this labour shortage, as people don’t want to risk returning to the workplace and contracting COVID-19.

The manufacturing and retail industry has also faced a labour shortage due to lockdowns in developing countries. However, it is returning due to online purchases. A seasonal labour shortage in the hospitality industry (hotels, tourism) also rose sharply and people are finding new employment options due to lack of job security in this industry. Farming and forestation are also the industries facing labour shortages which have caused a reduction in supply chains.

The following are the steps that governments should take to counter labour shortage in the labour market:

• Should provide incentives to the laborers to work in the industries that are facing a large
amount labour shortage
• Should adopt a job-rich approach, backed by stronger employment policies and
institutions, better-resourced and comprehensive social protection systems
• Provide opportunities to foreign workers
• Policies to provide job security in the critical industries facing a labour shortage