Even though Covid’s impact on the labor market is small it still adds to inflation in a tight labor market.
I disagree. It’s a HUGE factor. Earlier in your note, you state Another half a million workers have dropped out of the labor force due to lingering effects from previous Covid infections…
I looked at some of the Covid infection / deaths / long-haul stats in May 2022
https://watchingtheherd.blogspot.com/2022/05/peak-oil-investment-inflation.html
Think about these statistics from a labor market standpoint. Assuming the cases not ending in death only involved a 2 week absence from work, the case quantity means we lost 101 million weeks of labor over two years. For the fatal cases, we LOST 255,683 workers entirely.Think about the impact of long-haul COVID on these numbers. Estimates range that between 14 and 30 percent of people contracting COVID experience long-haul symptoms that range from merely unpleasant to chronic brain fog / fatigue / pain. If only 10 percent of the long-haulers are experiencing those extreme symptoms, that could be another .10 x .30 x 50,900,000 or 1,527,000 people not fully present in the labor force.
500,000 versus 1,500,000 – take your pick. It’s a HUGE number regardless and HUGE hit to labor markets, especially in high-skill fields (medicine, trades, engineers, etc.). It seems VERY clear to me that we don’t have a classic “monetary” inflation problem inflating wages and we don’t have a lazy worker problem limiting supply. We have limited supply by having hundreds of working age people DIE and a multiple or two more experience life-changing illness that forced them to fall down the skilled work ladder away from work they cannot handle or off the working career ladder entirely.
WTH