Bright future for global workers in 2022

Bright future for global workers in 2022

Unlike the obsession with unemployment after the financial crisis, post-Covid-19 workers have more job opportunities and greater bargaining power.

Workers around the world have been going through tough times as economies stalled due to the pandemic in 2020 and 2021. In the first year Covid-19 emerged, global working hours fell 9%. . In some countries, unemployment has risen so rapidly that the entire social security system has collapsed.

Low-wage or low-skilled workers are more affected. Some analysts fear that the pandemic will usher in a harsh era. In it, this group of workers will struggle to find work or see their work done by robots.

However, there are many reasons not to be so pessimistic. Labor markets in advanced countries recovered better than expected. In the middle of last year, the OECD calculated that, if a second wave of Covid-19 broke out, the unemployment rate in member countries would be around 9% by the end of 2021.

In fact, many countries have seen three or even four outbreaks. However, the unemployment figures are still better than expected, with currently around 6%. Even countries that are not seen as having a quick economic recovery, like those in the eurozone, the labor market has recovered fairly quickly.

A job advertisement in Manhattan, New York City (USA). Photo: Reuters

In September 2021, the euro area's (seasonally adjusted) unemployment rate was 7.4%, down from 7.5% in August and 8.6% in September 2020. The EU-wide unemployment rate in September 2021 was 6.7%, down from 6.9% in August and 7.7% in September 2020. These figures are published by Eurostat - the statistical office of the European Union.

In the US, the unemployment rate fell to 4.6% last month, with 19 states below the national average.

The job outlook for global workers next year may be even better than expected, thanks to three key factors as pointed out by The Economist . The first factor is related to working from home . Estimates show that people will spend five times more time working out of the office than they did pre-pandemic. This tendency increases both happiness and productivity.

The second factor is related to automation . Many economists assume that the pandemic will pave the way for the rise of robotics, as AI-powered machines will take over many of today's jobs. This is certainly true since past pandemics have also encouraged automation, in part because robots don't get sick.

But so far, according to an analysis by The Economist , there is little evidence that automation is happening on a large scale. Jobs that are thought to be vulnerable to mechanization are still growing as rapidly as other types of jobs.

The third factor is related to policy . Amid the pandemic, politicians and central bankers are more concerned with reducing unemployment than pursuing other goals, such as reducing inflation or public debt.

This is a different approach from previous crises, when most countries quickly tightened their belts. This time, countries are committing unprecedented resources to economic recovery over the next 5-10 years.

For example, the US has committed to spending trillions of dollars. US Federal Reserve Chairman Jerome Powell even promised to stabilize monetary policy until employment increases significantly. Meanwhile, the European Union is borrowing for the first time on behalf of its member states to support recovery plans. That suggests eurozone politicians are less obsessed with austerity than in the past. They believe that investing in productivity and work gets people back to work.

As a result, workers will have more bargaining power. In the US, the number of people leaving their jobs every month is near a record level. According to a survey of this country's Labor Department released last weekend, in more than half of the US states, the rate of people leaving jobs increased rapidly in September.

The dropout rates were highest in Hawaii, Montana, and Nevada, at 7.1%, 4.8%, and 4.5%, respectively. In total, 34 states have a higher unemployment rate than the nation at 3 percent. Businesses have been desperate to raise wages at a record pace and offer a host of other perks like flexible working hours and cash bonuses to attract and retain workers, Bloomberg reports. But those privileges, coupled with a tight labor market, have made the situation even more chaotic. Nationally, 4.4 million Americans quit their jobs in September.

According to the Economist , employers who offer low wages or poor conditions are having a hard time recruiting. There are currently about 30 million positions still looking for people in the developed world. This is a record number. In fact, the fact that workers have too much power can cause inflation (because they demand consistently higher wages).

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