Research into the long-term effects of Covid-19 on the US workforce has confirmed what anyone who has waited for a delivery or been unable to get a restaurant table already knows: the pandemic has resulted in massive labor shortages.
In addition to the quarter-million people of working age who have died from coronavirus, the National Bureau of Economic Research estimates that at least twice that number have permanently disappeared from the workforce.
Other studies have shown the impact of long Covid on the workforce, where symptoms persist months or years after the initial infection. According to a Brookings Institution study published last month, as many as 2.4 million people have missed work, are temporarily absent, or are working fewer hours due to the virus’s lingering effects.
However, this new study focuses on the pandemic’s apparent effect on labor supply and those who have permanently stopped working – by choice or necessity – as a result of their illness.
According to the researchers, one of the main reasons is that a large number of working people are transitioning directly from illness to retirement. They examined federal and state level data on Covid infections as well as deaths to assess the likelihood of workers remaining in the labor force after becoming ill.
“Our estimates suggest that Covid-19 illnesses have reduced the US labor force by approximately 500,000 people,” write the study’s authors, Gopi Shah Goda of Stanford University and Evan Soltas of the economics department at the Massachusetts Institute of Technology.
“Covid-19 illnesses have a long history of reducing labor supply.” We estimate that workers who miss a week of work for health reasons are 7% less likely to be in the labor force one year later than workers who do not miss a week of work for health reasons.”
According to the study, “many who become ill but survive Covid-19 suffer from long-term health problems… approximately 500,000 adults are not working or actively looking for work due to the long-term effects of Covid-19 illnesses.”
According to the researchers, while labor shortages caused by the pandemic are visible in all sectors of industry, determining their long-term viability has been difficult.
“Many in government and the media have speculated that such post-acute conditions have reduced labor supply,” the authors write. “However, data limitations have made it difficult to assess these impacts and the economic costs of Covid-19 illnesses in general.”
According to The Guardian, some employers in the United States are responding to perceived labor shortages by pursuing cheap sources of labor, such as people currently or formerly incarcerated.
The restaurant industry recently announced a prison work release program for the food service and hospitality industries in Michigan, Texas, Ohio, and Delaware. In response to staffing issues that were disrupting production lines, Russell Stover candy production facilities in Iola and Abilene, Kansas, began using prison labor through the Topeka correctional facility in April.
Meanwhile, a waste management conference in Nevada in June heard that tapping the less “traditional” talent pool could help solve their own industry’s labor shortage.
While the pandemic may have forced some workers to consider new industries, it also hastened other trends that will almost certainly improve, rather than harm, the efficiency of matching jobs to workers. Skills-based hiring was one trend that accelerated during the pandemic, with 45% of companies on LinkedIn now relying on skills data to search for and identify candidates.