Mass of Workers Off Sick With Omicron Causes Major Economic Disruptions

Approximately 3% Of The Labor Force Called-In Sick Last Week.

In offices across the country, people with Covid are asking their coworkers to cover for them when they're sick and unable to come in.  You get the kind of severe economic disruptions the United States is experiencing now, when your coworkers can't cover for you because, well, they also have Covid.

The Numbers

The US is seeing an average of 650,000 cases a day, which is more than twice the peak during last year's surge. It's also likely to be a significant underestimate due to how many individuals are testing positive with at-home tests or who aren't getting tested at all.

According to Capital Economics' Andrew Hunter, up to 5 million US employees had to stay home last Monday as a result of so many people becoming sick. That means around 3% of the workforce was off, triggering a chain reaction that rippled through important sectors such as health care and education.

Last week, nearly 20% of US hospitals reported critical staffing shortages, the highest proportion since December 2020.  It's still worth noting that Alaska Airlines canceled 10% of its flights throughout January, citing an "unprecedented" number of employees calling in sick, in the aviation business, where staff shortages are well-known.

But Sometimes, It’s Not That Easy

In the United States, many low-income workers are being forced to choose between working sick or not receiving a paycheque. Only 33% of individuals in the bottom 10% of earners receive paid sick leave, as opposed to 95 percent of those in the top 10%. And while businesses increased their paid leave coverage early in the pandemic, they're starting to wrap that up.

The Centers for Disease Control and Prevention (CDC) last week changed its isolation guidance for sick individuals, allowing Walmart and Amazon, the two largest private employers in the United States, to cut paid leave.

Bottom Line

The Omicron burst, which has been compared to a blizzard by economists, in that it's a strong, sudden shock to the economy that will take some time to recover from but won't leave any serious scars.

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