Labour market post -Pandemic

Governments across the world have been generous with hiving more handouts either to employers to keep the payroll or employees directly.

The major measures taken by some companies are as follows:

Britain

7.5m furloughed workers’ wages are being paid in large part by the state

France 

government is topping up the majority of private-sector workers’ incomes after their hours were cut

US

 Increased unemployment benefits by $600 per person per week, almost trebling the average payout.

 Germany

Boosted their existing subsidy schemes for furloughed or partially furloughed workers.

France

Boosted their existing subsidy schemes for furloughed or partially furloughed workers.

Canada

$2000 to employees laid off, along with several schemes to employers to keep the payroll. The benefit scheme is also extended to students.

 These policies are a must for replacing the social income, maintaining the social distance and above all to keep the economy from falling apart. The government subsidies cannot replace the private income forever. All economic upheavals tend to reorient the labour market. The consumer behaviour will change post-pandemic as the nature of jobs in restaurant, travel and tourism, cinemas will undergo a paradigm change. Employees will demand higher pays for performing certain jobs where you need to work closely with customers or colleagues. Essential care workers, along with construction may see a spike in the salary.

According to research, 4 in 10 jobs lost in the pandemic in America will not return. 3 in 10 job losses are offset by new hiring. In America, roughly three-quarters of recipients of unemployment insurance are receiving more than they did in work. That blunts the incentive to seek new jobs. And yet cutting support abruptly would leave legions of unemployed workers fending for themselves in brutal conditions, especially in America with its thin welfare system.

The government will have a difficult time balancing the act in balance the welfare of the employees with the economy. With certain jobs becoming irrelevant, its high time that the employees need to re-skill for future opportunities. The economic signals for each sector should not be ignored. If ignored, it will hamper productivity in the long term.

There will be an urgent need to redraw the labour laws, especially in developing countries. This includes a meaningful internship, close collaboration with industries, labour flexibility, government support for training, cutting payroll taxes etc. Post lockdown, the gig economy will find traction due to its inherent benefits and lees strings attached for the employers