Sent on Nov 11, 2022, 3:00 pm
Where have the workers gone? In the UK, many employers are asking themselves the question of the recruitment difficulties they have encountered since the lifting of health restrictions. In a job market that remains very dynamic despite the economic slowdown, the number of vacancies remains at record levels, at nearly 1.3 million according to data from the ONS (Office for National Statistics), up from nearly 800,000 before the pandemic. .
Initially, it was the new post-Brexit immigration rules that were called into question: European workers, who returned home during Covid, could not return due to the end of free movement. Another track has been proposed for some time: the health of workers has deteriorated, and could partly explain the serious shortage of manpower.
500,000 Britons excluded from the labor market
This thesis is accredited by the new data published this Thursday by the ONS. According to the statistical office, nearly 500,000 Brits remain out of the job market for health reasons.
The upward trend already existed before Covid, but it accelerated with the pandemic, a number that went from 2 million in spring 2019 to 2.5 million in summer 2022. “Sick leave has become a frequent cause of economic inactivity ”, explains the Ons in a note, specifying that they now represent 28% of people out of the labor market, compared to 25% at the beginning of the pandemic.
It is difficult to isolate the effect of the long Covid, drowned in a category of “other diseases” in these statistics. On the other hand, mental disorders, which could derive from containment measures, increased by 22%, while musculoskeletal problems (back pain, neck pain, etc.) increased by 31%. “It is possible that teleworking after the pandemic has led to an increase in this type of chronic disease,” notes the ONS.
The first to be affected are workers between the ages of 50 and 64, who account for 55% of these sick leave. More surprisingly, the phenomenon increased significantly between the ages of 24-35 during the pandemic (+ 42%).
Risk of an inflationary spiral
If these figures provide new elements, the debate is still open. Economists are particularly concerned because labor shortages can exacerbate the risks of an inflationary spiral.
During a hearing on the matter in the House of Lords, Huw Pill, the Bank of England’s chief economist, acknowledged that it was a cause for concern for the central bank. “These shortcomings give bargaining power to workers demanding wage increases,” he explained.
Depending on the origin of these shortcomings, the response of the public authorities will not be the same. In another study, economists from the Institute for Fiscal Studies (IFS) challenged the notion that sick leave played a prominent role. “The increase in the number of inactive people for health reasons does not mean that they have left the labor market for this reason”, explains the IFS. In short, the people concerned could be inactive, and because of this inactivity they had health problems, according to the adage “work is health”.
According to them, it is early retirement that explains the decline in the employment rate among the elderly. “In fact, the two are interdependent, analyzes Huw Pill. It is difficult to untangle the effects of age and disease. “
To shed light on the phenomenon, the Demos “think tank” conducted qualitative interviews with employees who left the labor market prematurely. In fact, it shows that all these effects are linked.
Health problems, coupled with a poor corporate culture and a lack of managerial flexibility, may have forced these people to stop working. Many suffer from this decision: “Almost all participants say they would have preferred to continue working if they could,” the report said.