Covid cost employers $213 billion; downturn will force workers to accept lower quality job...

Covid-19 cost employers $213 billion

The cost to US employers of the Covid-19 pandemic has been priced at a whopping $213 billion in terms of lost work hours, according to research published this week by IBI. Analysts have estimated that the total number of lost hours attributable to the pandemic were 6.6 billion hours (5.2 billion in 2020 and 1.4 billion in 202). Particularly hard-hit industries were educational services, health care, and social assistance (a cost of $30.8 billion), public administration ($27.1 billion), construction ($23.9 billion), waste management services ($22.4 billion), and manufacturing ($21.5 billion). The first year of the pandemic saw the average number of lost hours increase by 39%, while in the second year it rose by an average of 11%. Sectors such as administrative support (15%) and craft workers (35%) continued to experience higher than average lost hours in the second year. Total economic loss was $167.4 billion in the first year and $45.7 billion in the second year.

Economic slowdown will force workers to accept lower quality jobs

A new report by the International Labor Organization predicts the slowing global economy will force workers into accepting lower quality, poorly-paid jobs which lack job security and social protection. Its World Employment and Social Outlook Report, 2023, suggests that global employment growth will hit just 1% this year (half what it was in 2022), while global unemployment is expected to grow by around 3 million, to 208 million. The result, it says, is that many workers will have to accept lower quality jobs, often at very low pay, and sometimes with insufficient hours. It suggests women and young people will face the most difficulties in the labor market. In Northern America there will be “few” or “no employment gains in 2023,” and unemployment “will pick up,” says the report. “The need for more decent work and social justice is clear and urgent,” said ILO director-general, Gilbert F. Houngbo. Added Richard Samans, director of the ILO’s research department and report coordinator: “The slowdown in global employment growth means that we don’t expect the losses incurred during the COVID-19 crisis to be recovered before 2025.”

US tech firms accused of replacing workers with cheaper talent from Latin America

Firms laying off staff in America are simply replacing them with cheaper equivalents from Mexico, Peru, and Uruguay, according to a poll of entrepreneurs there by Rest of the World. It claims “US companies are tightening their belts [but], their technical needs remain the same, leading them to look abroad for cheap programming labor.” Not only does it suggest this is not right, but it also argues the practice means these Latin American countries are themselves experiencing talent shortages. “Given that it’s not that easy for US-based companies to find experienced talent in Latin America, it is fair to assume that local companies are struggling even more,” said Carlos Ganoza Durand, a Los Angeles-based Peruvian product manager at the on-demand staffing startup Wonolo. Rest of the World says companies in Uruguay and Peru are now struggling to offer attractive salaries, and are forced to find creative alternatives to make up for uncompetitive paychecks. “It’s almost impossible for local startups to cash in from layoffs in big tech,” said Alexander Yaroshewski, co-founder and CEO of the Mexico-based fintech startup, Crecy.

Goldman Sachs staff laid off via ‘phony business meetings’

Staff who were laid off by US investment bank, Goldman Sachs, were reportedly asked to attend meetings with CEO David Solomon, before realizing that they were ‘phony’ and they were actually being summoned to be sacked. This is according to a report in Business Today. Instead of finding the meeting they had expected, staff were unceremoniously told by heads of teams that they were being asked to leave to company. One employee said: “I got here early for the meeting and was told the news. Meeting was put on his calendar under false pretenses. Managers were sorry to do this but their hand was forced.” Staff were also reportedly told that they could leave immediately, or wait for more of their colleagues to turn up, so they could say their goodbyes. It is understood that around 3,000 staff have been laid off by Goldman Sachs since the start of 2023.

Davos: Home working hasn’t worked…

Bosses gathered at the World Economic Forum in Davos this week, have made their opinions clear when it comes to what they think about home working. Jane Fraser, CEO of US giant, Citi, said some Citi employees might be in need of coaching to improve their productivity when working at home. She added: “You can see how productive someone is or isn’t and if they’re not being productive we bring them back to the office, or back to the site, and we give them the coaching they need until they bring the productivity back up again.” Although Fraser acknowledged that flexible working during the pandemic had helped ‘attract and retain and get the best out of our talent’, she also said: ‘We learnt that we do want people collaborating and they collaborate better together.” But it was Larry Fink, chief executive of BlackRock, the world’s biggest asset manager, that was far more forthright with his verdict. He said simply that: “Remote working has not worked.”

Article Continues Below

…but most companies won’t be changing their work from home policies

Despite Disney being the latest firm to insist its hybrid workers will now have to return to the office at least four days per week by March 1st, a new survey suggests most companies do not intend to change their rules anytime soon. Think tank, The Conference Board, asked more than 1,100 global corporate executives — including 670 CEOs — about their plans for remote work moving forward. Surveyed during November and December last year, 24% of respondents worked for US-based companies, which ranged from midsize businesses to those averaging over $5 billion in annual revenues. But it found that amongst US CEOs, only 3% said they were planning to reduce remote work at their companies. Meanwhile 5% said they were actually planning to expand it. It said in its findings that: “there appears to be an emerging equilibrium around remote work in economies that more rapidly moved to hybrid models during the pandemic.” Disney’s announcement, last week, represented a shift from the company’s previous three-days-a-week policy. Two days later, Starbucks told employees that form January 31st, those within commuting distance must work from the office at least three days per week. This is an uptick from the company’s existing one-to-two days per week approach.

Amazon hit with citations for breaches in employee safety

Retail behemoth, Amazon, has been slapped with three citations from The Department of Labor’s Occupational Safety and Health Administration (OSHA), for failing to keep warehouse workers safe, and by exposing them to ergonomic hazards that have resulted in injuries to staff. According to OSHA, employees were exposed to risk due to the high frequency with which there were required to lift heavy items, or assume awkward positions – such as bending down, twisting or reaching for products. Doug Parker, the head of OSHA, said Amazon’s processes were: “designed for speed but not safety, and they resulted in serious worker injuries.” The Seattle-based online retailer faces $60,269 in possible fines for the violations, which OSHA has classified as “serious” though not willful. In a statement, Amazon spokeswoman Kelly Nantel said: “We take the safety and health of our employees very seriously, and we strongly disagree with these allegations and intend to appeal.”

 

Peter Crush is the interim editor of TLNT. He’s an award-winning journalist based in London, and he writes exclusively about the ever-changing world of work.

Topics