How has COVID-19 affected the labor market?

What is it about?

The COVID-19 pandemic has had a major impact on the economy of the world. Businesses and employees worldwide suffered the brunt of its impact. A 2020 paper reports how this pandemic affected the Canadian labor market. The authors of this paper studied the changes in employment and working hours due to the pandemic. They found that work hours and employment had greatly decreased between February and April 2020. Certain sections of the workforce, they found, were more affected than others. The most affected workers included: • Those with the lowest salaries; and • Those with the least bargaining power, including:  Young workers,  Those who were paid hourly wages,  Those who did not have a labor union,  Serving clients in industries majorly affected by COVID-19.

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Photo by Mathieu Stern on Unsplash

Photo by Mathieu Stern on Unsplash

Why is it important?

The pandemic has adversely impacted both the demand and supply of labor. To revive the economy, governments need to design effective policies to address the crisis in the labor market. But this is an uphill task! It is here that this paper could help. The data provided in it could guide policymakers in identifying target areas and industries. Then, government regulations could be introduced in these specific areas. This targeted approach could aid the recovery of the economy in many countries. KEY TAKEAWAY: The government needs to make regulations providing a safe working environment for employees, and support with childcare and schooling for mothers. This will enable them to resume work. Labor policies should also consider providing income support for workers with a lower salary and focus on reviving the demand for labor. This is especially important in industries affected by COVID-19