After lockdown hardships, workers now have more bargaining power than they have had for years
the world suffered hardship during the lockdowns of 2020 and 2021. In the first year of the pandemic global working hours declined by 9%. In some countries unemployment shot up so quickly that social-security computers broke. Workers on low salaries or with fewer qualifications bore the brunt. Some analysts worry that the pandemic will usher in a harsher era in which such workers struggle to find jobs, or see their work done by robots. But there is reason not to be so pessimistic.
The second factor relates to automation. Many economists assume that the pandemic will usher in the rise of the robots, with AI-enabled machines taking jobs. It is certainly true that past pandemics have encouraged automation, in part because robots do not get sick. But so far, according to’s analysis, there is little evidence of automation taking place. Jobs that are supposedly vulnerable to mechanisation are growing just as quickly as other sorts.
The third factor relates to policy. In the wake of the pandemic, politicians and central bankers have become more interested in reducing unemployment than in pursuing other goals, such as reducing inflation or cutting public debt. This is a different approach from that taken after the financial crisis of 2007-09 and one reason why a “jobless recovery” followed that period.
The upshot is that workers have more bargaining power than they have had for years. Already in America the number of monthly resignations is near all-time highs. Employers offering low wages or poor conditions are struggling to fill positions: unfilled vacancies, at 30m across the rich world, have never been so high. Too much worker power can be inflationary; employers need some bargaining power too. Yet for much of the past decade businesses have had the upper hand.
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