Omicron is Covid’s latest blow to the economy
Covid-related absences are creating headaches for companies that were struggling to hire workers even before Omicron. Restaurants and retail stores have reduced their opening hours. Broadway shows have canceled performances. Airlines canceled thousands of flights over the holidays because so many crew members called in sick; one day last month, nearly a third of United Airlines employees at Newark Liberty International Airport, a major hub, fell ill.
At Designer Paws Salon, a pet grooming company with two locations in the Columbus, Ohio area, business has been strong in recent months, thanks in part to a pandemic boom in pet ownership. But Misty Gieczys, the company’s founder and chief executive, is struggling to fill 11 positions despite generous benefits and a salary of up to $95,000 a year in commissions and tips.
Omicron only made things worse, she said. Since Christmas, she has received only three applications and only one candidate replied to her after she contacted her. Then Ms Gieczys, who has two young daughters, contracted Covid-19 herself for the second time, forcing her to stay at home. That, in addition to childcare center closures due to the virus, has meant she has spent a lot of time away from work.
“If I didn’t own, I think I would be fired, honestly,” she said.
But while the Omicron wave has contributed to corporate staffing issues, there is no evidence so far that it has delayed labor market recovery more generally. New jobless claims have risen only modestly in recent weeks, suggesting that employers are holding on to workers. Job postings on the Indeed career site declined only slightly from record highs.
“It’s a big difference from 2020, when there were massive layoffs,” said Jason Furman, a Harvard economist who served as an adviser to President Barack Obama. “Now employers are holding people back because they expect to be in business within a month.”
The new variant could worsen inflation (or possibly improve it).
When the pandemic began in early 2020, it was a shock to both supply and demand as businesses and their customers recoiled from the virus.
However, with each successive wave, the impact on demand has lessened. Businesses and consumers have learned to adapt. Federal aid helped support people’s incomes. And more recently, the availability of vaccines and improved treatment options have prompted many people to return to more normal activities.