Labor shortages continue to disrupt economic recovery

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UK Prime Minister Boris Johnson today apologized for the recent disruption to UK businesses, as growing numbers of workers urged to self-isolate after being told by the NHS Covid-19 app that they have been in contact with an infected person.

“I apologize to all those who are in business from top to bottom of the country, in all kinds of services – public sector or otherwise – who suffer inconvenience,” he told MPs at Westminster.

The food industry is the last sector to voice its concerns. Supply chains are “starting to fail” as staff shortages cause production chains to stall, Nick Allen, head of the British Meat Processors Association, said earlier today. “You’re starting to see this at the retail level and in restaurants. Everyone has a hard time getting things out. ”

While the ‘pingemia’ may be unique to the UK, labor shortages are becoming more common in the developed world, as economies reopen and businesses rush to rehire staff.

Countries that have “hermit nation” policies to keep borders closed, such as Australia and New Zealand, have been hit hard, especially in the agricultural sector, where employers can no longer rely on an army of foreign backpackers to pick their crops.

Meanwhile, American workers are using their new leverage to increase wages and conditions and improve access to training. A survey last month showed that the share of employers willing to offer vocational training jumped 49% from June 2019. Even teenagers were able to take advantage, seizing the rare opportunity to fill higher-paying adult positions. .

At the same time, in advanced economies, there is a mismatch between those without work and the jobs available, according to an OECD report released earlier this month. Low-skilled workers, who were most likely to lose their jobs at the start of the pandemic, are ill-prepared to move into the sectors where hiring is highest.

Yet the change underway in countries like the United States, where employees traditionally have little muscle compared to employers, could be a turning point. American workers have also found an ally in US President Joe Biden, who took action like last week’s executive order limiting the power of employers to use non-compete clauses that prevent employees from leaving their jobs. for better ones in the same area.

As Mark Zandi, chief economist at Moody’s Analytics, says: “There have only been a few moments in history where workers have had the upper hand in negotiations with their employers and this explains why the distribution of wealth is. become so asymmetrical over the past three or four decades.

Mondial economy

New data has shown that UK public finances are recovering better than expected, with borrowing falling to £ 22.8bn in June, down £ 5.5bn from last year. But Chancellor Rishi Sunak still has little room for gifts in his fall expenditure review, according to the Institute of Fiscal Studies. Borrowing figures are still at the second highest level for June since monthly statements began in 1993.

Even if China’s zero tolerance policy managed to contain the first coronavirus outbreaks, the lack of an exit strategy could delay the return to normal for the world’s second-largest economy. Beijing faces the additional deadline of being ready to host the Winter Olympics in February.

Rising rental costs following pandemic-driven decline could be the ‘sleeping giant’ tipping the scales of the debate on American inflationwrites James Politi, FT’s Washington bureau chief. President Biden said this week his administration will remain vigilant in the face of inflationary pressures that could undermine the country’s economic recovery and its spending plans.

Line graph of the Consumer Price Index for all urban consumers: Housing in the U.S. city average (% annual change) showing that U.S. housing costs have increased slightly

Business

The surge in Covid infections in Southeast Asia adds to the global semiconductor shortage, as manufacturers in Vietnam and Malaysia are affected by epidemics. The region manufactures 15-20% of the world’s ‘passive components’, including resistors and capacitors used in smartphones, and is also an important hub for other parts of technological production such as testing and packaging. . Our Big Read examines the EU’s plans to join the world’s top chipmakers.

Global wafer semiconductor production capacity

United Airlines, a carrier particularly affected by the pandemic due to its focus on business and international travel, said it would return to profit in the third quarter as it reported a second quarter net loss of $ 434 million. dollars. EasyJet said it would increase flights as bookings increase from mainland Europe, but warned the UK was being left behind due to its travel restrictions in the event of a pandemic.

clothing retailer in the UK following raised its sales and profit guidance for the full year, announcing exceptional sales over the past three months, supported by pent-up consumer demand. Royal courier, the UK’s largest logistics group, said the pandemic habit of buying products online persisted. Even though deliveries declined from last quarter with the reopening of main streets, the company saw a 35% increase in domestic parcel deliveries in the second quarter, compared to the year before the pandemic.

Markets

the European Central Bank will issue new guidance on monetary policy tomorrow, with investors betting on the bank’s expansion of its emergency bond purchase program and trying to show it is determined to hit its new inflation target. ECB President Christine Lagarde promised that the new guidelines would be “clearer and sharper” with less jargon. European equities jumped on hope for a continued recovery.

Gym operators and restaurant chains, which are currently experiencing a strong rebound in demand with the reopening of economies, are taking the opportunity to appeal to investors for money. “It’s the simplest business plan in the world,” said the founder of buyout company Epicurean Endeavors. “We believe that the desire for hospitality has never been higher and that the market has never been in a worse situation. The opportunities are more incredible than they’ve ever been, ”said Andrew Fishwick.

Record demand from Chinese steel mills fueled by the country’s economic recovery has left iron ore miners from Australia to Brazil struggling to cope. The situation suggests that iron ore prices, which have surged over the past year, could stay near record highs and avoid the selling pressure on other commodities in recent weeks.

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Keine Luxure Comments on leaders’ love for offices is based on an outdated fantasy

The main voices of opposition to this completely reasonable and realistic vision are those which have a direct interest and which fall into two categories: managers worried about the revelation of their own lack of utility and investors, promoters. and real estate agents. For some reason, these have been given particularly generous airtime, but they can’t hold back the tide. The desks made the pre-internet work easier. They are no longer facilitators, they are only one of the commodities or utilities available to companies to carry out their activity. They are not essential to this, as has been proven over the past 18 months, but they probably improve most businesses to some extent. But this scope is relatively small and specific to certain industries and roles. Only those with a vested interest advance the narrative that offices are indispensable and vital. IT infrastructure is essential and vital; offices are not. We will need less of them, which means they are surplus and are worth less. It terrifies the real estate industry, which is fighting tooth and nail to get people to hold on to these old beliefs. They’ll lose eventually but they’ll scream and scream about it while they do it. . .

Final thought

Vintage video games have followed gallstones of medicinal cows and digital collages of non-fungible tokens to become the last hugely bloated esoteric asset class, writes Leo Lewis, FT’s Asia editor. The market could now be in the sweet spot where demand from aficionados is amplified by an influx of hot money that views articles purely in terms of investment, he writes.

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