Omicron workforce disruption Jan 2022

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In workplaces across the country, Americans who have Covid are asking their colleagues to cover for them while they’re out sick. And when those coworkers can’t, because, well, they also have Covid, you get the kind of severe economic disruptions the US is facing right now.

The numbers: The US is averaging about 650,000 cases a day, more than double the peak during last winter’s surge. It’s also likely a big undercount, given how many people are testing positive using at-home tests or who aren’t getting tested at all.

With so many people getting sick, up to 5 million US workers were forced to stay home last week, Capital Economics researcher Andrew Hunter calculated. That means about 3% of the labor force was knocked offline, setting off a cascade of damaging effects across critical industries like health care and education.

  • About 20% of US hospitals reported critical staffing shortages last week, the highest share since December 2020.
  • One California superintendent taught a high school physics class last Monday after 300 teachers were absent from schools, primarily because they got infected with Covid.

And even in the aviation industry, where staffing shortages are well documented, it’s still worth noting that Alaska Airlines canceled 10% of its flights for the remainder of January, citing an “unprecedented” number of employees calling in sick.

But sometimes, it’s not so easy to do that

Many low-wage workers in the US are being forced to choose between going to work sick or losing out on a paycheck. Only 33% of workers in the bottom 10% of the wage bracket get paid sick leave, compared to 95% in the top 10%. And while companies juiced up their paid leave policies early in the pandemic, they’re starting to wind them down.

  • Walmart and Amazon, the two largest private employers in the US, cut paid leave last week after the CDC shortened its isolation guidance for infected people.

Bottom line: Economists have likened the Omicron surge to a blizzard—a sharp, sudden shock to the economy that will take some time to dig out from but, once it’s over, won’t produce many lingering effects.

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