Jobs Are Increasing... But US Companies Fear Workforce Shortage Due to Omicron

Jobs Increase but Sick Leaves Rise Due to Omicron

"No workers available, difficult to meet demand... No short-term improvement expected"

[Asia Economy Reporter Kim Hyunjung] The Wall Street Journal (WSJ) reported on the 6th (local time) that the spread of the COVID-19 Omicron variant has intensified labor shortages in companies, raising concerns about the impact on business activities. This is because, while the job market is improving, the rapid spread of the variant virus has led to a sharp increase in the number of sick leaves.

According to U.S. demographic data cited by the Journal, from the 1st to the 10th of last month, about 8.8 million workers, equivalent to approximately 6% of U.S. payroll employees, were absent due to being sick or caring for sick individuals. In reality, the U.S. is experiencing more than 100,000 new COVID-19 cases daily.

In January, nonfarm jobs in the U.S. increased by 467,000, but companies are struggling with labor issues. McDonald's is a representative case. As of the end of January, 1% of McDonald's stores have shortened their operating hours. Due to disruptions in hiring caused by the Omicron spread, some stores have been reducing operating hours by 10% since mid-December last year.

Michael McGarry, CEO of PPG, a paint, coatings, and specialty materials manufacturer headquartered in Pittsburgh, revealed during last month's earnings announcement that 40% of the entire workforce had been absent in recent weeks. He stated, "Compared to October and November, sick leaves due to COVID-19 in December and January have exceeded four times," adding, "Currently, the most challenging task at PPG is for factory managers to check every morning how many employees are on sick leave."

In the case of FedEx, a delivery company, some air cargo services were suspended due to sick leaves caused by COVID-19 infections among delivery and operations staff. FedEx also disclosed that labor shortages in the fourth quarter of last year resulted in an additional cost of $470 million. Related services and flights have resumed since last week.

Additionally, Domino's Pizza announced a policy to refund $3 to customers who pick up their orders themselves. This is a move by the pizza chain industry to address partial staff shortages.

The fact that workers are moving to find "better conditions" among the rapidly increasing jobs recently has also become a burden for companies, as the U.S. turnover rate is approaching an all-time high.

Ryan Marshall, CEO of the U.S. construction company PulteGroup, stated that they are deliberately slowing sales due to labor shortages. He explained, "With the rapid increase in COVID-19 cases, it has become difficult to find on-site workers, and it has also become difficult to expand team sizes to meet demand," adding, "I do not expect the situation to improve in the short term."

Devin Stockfish, CEO of the lumber company Weyerhaeuser, also said, "Due to COVID-19 quarantines, it has become even harder to find additional workers such as truck drivers, logging workers, and sawmill employees, making it difficult to increase production," and predicted, "Labor difficulties will not be immediately alleviated within the first half of the year."

This content was produced with the assistance of AI translation services.