U.K. COVID “Pingdemic” Sparks Labor Shortage

Limited Exemption Being Rolled Out
Rather than move the date forward, the government responded by exempting workers in several sectors from the need to quarantine. UK media reports that some 500 sites in the food sector have already been told that their staff no longer need to self-isolate. Instead, firms must carry out daily COVID testing of workers, which many companies say is too burdensome.

“[The] expansion of testing sites is not the solution for retail, certainly not the convenience sector that can’t do daily testing on-site [just too small],” James Lowman, chief executive of the Association of Convenience Stores, which represents some 33,500 smaller food stores, wrote on Twitter.

Some unions, meanwhile, have advised their members to ignore any quarantine waiver, citing concerns that workplaces could become superspreader sites that lead even more staff to self-isolate.

“The decision taken by the government to introduce exemptions for critical workers from self-isolation guidance has been driven by resources, not by what is safe for the workers or their families,” said Gary Smith, general secretary of the GMB union, which represents some 600,000 workers in several sectors including retail, social care and education.

“GMB is urging the Ministers to rethink their decision to gamble with the lives of our key workers, before it’s too late.”

Worst Labor Shortage Since 1997
Many business leaders say the pingdemic is aggravating the worst labor shortage in more than two decades which became evident during the rush to reopen businesses after the winter lockdown. Hundreds of thousands of staff who were laid off or furloughed have since found other work. Delays in hiring replacements are creating huge bottlenecks.

Meanwhile, the lack of overseas workers, due to immigration rules introduced following the UK’s departure from the European Union in December, has added fuel to the fire. 

“Many seasonal workers have stayed away because of Brexit and the barriers to entry,” Duncan told DW. “The pandemic and restrictions on travel have also hampered numbers of workers to the UK.”

Another factor is the summer holiday season. Large numbers of staff are currently taking long periods of annual leave, having delayed their vacations for several months due to the lockdown.

Further Inflation Spike Expected
The labor squeeze is also feeding into other economic bottlenecks created by the pandemic, including delays at container ports in China and other key export locations. The holdups have sparked a shortage of imported raw materials and goods, fueling a rise in inflation. Policymakers insist the spike is transitory, but some business leaders fear higher prices could be long-lasting.

“Businesses are paying higher wages to retain [or] attract talented, skilled staff,” Duncan told DW. “This will lead to higher cost burdens for business and ultimately consumers as inflation rises.”

He cited UK PMI data showing that manufacturing, construction and services sectors were seeing delays to orders as a result of the labor shortage just as firms were trying to forward buy stock to head off expected shortages in raw materials.

Nik Martin is freelance journalist  This article is  published courtesy of Deutsche Welle (DW).