As the Omicron variant rips across the U.S., in early January almost 9 million Americans said they were not working because they had COVID-19 or were caring for someone with the virus — triple the number from a month ago. The surge in sick workers is impacting industries ranging from hospitals to airlines, adding to the nation’s labor crunch.
The “,” as some have called it, is taking a toll on many businesses and households, with people again forced to scale back work as the disease spreads. Weekly jobless claims, an indicator of layoffs, to their highest level in three months, a sign the ongoing wave in infections driven by Omicron is hitting the job market.
The data on the number of sidelined Americans, collected by the Census Bureau, provides the first real-time look at how the spike in COVID cases is affecting the nation’s workforce. Since early 2020, the agency has asked people why they aren’t working — with answers ranging from “I’m retired” to “My employer shut down due to the pandemic” — to more precisely gauge the pandemic’s effects on the economy.
The most recent Census analysis reflects the highest number of people who have called in sick due to COVID since the survey began. To put that in perspective, 9 million people represents about 6% of the U.S. workforce.
“Time and time again, we see that this economic recovery is tied to the pandemic and public health measures,” noted Luke Pardue, economist at payroll services company Gusto, whose research has found that service workers in January have worked fewer hours each week compared with a year earlier.
The number of COVID-19 cases, hospitalizations and deaths continued to increase in the first week of January, according to the U.S. Centers for Disease and Prevention. Omicron accounts for 98% of cases in the U.S., the agency says.
About 8.8 million people told the Census they weren’t working from December 29 to January 10 because either they either had COVID or were looking after someone with the illness. Another 3.2 million people said they weren’t working because they were worried about getting or spreading the coronavirus — up 25% from early December.
Experts say a prolonged sickout could dent the economic recovery, as more consumers worry about patronizing stores, restaurants or bars due to the higher risk of illness. Workers in service-related jobs in some big cities — which have suffered larger COVID spikes than other regions — are already seeing fewer hours, either because they have fallen ill or their employer reduced hours in response to the spike in cases, according to Gusto, which provides employers with payroll and other business services.
For instance, the average weekly hours in January for workers in service jobs in New York City is tracking at about 21 hours, down from about 27 hours a year earlier, Gusto found. Nationally, the share of total hours taken as sick leave or paid time off has risen from 0.4% to 5.2% during the past two weeks, according to Gusto’s data.
It’s not only restaurants and bars that are feeling the impact. Thousands of flights were canceled in recent weeks as airline workers called in sick, with Delta Airlines noting that 8,000 of itsin the last four weeks alone, or about 10% of the carrier’s workforce. Hospitals and other health care facilities are also under strain due to the rise in illnesses.
If there’s good news, it’s this: Some signs suggest the latest COVID-19 wave may be easing, including declining infection rates in Africa, where Omicron was first detected, and in the U.K., where the variant quickly became the dominant strain. Economists believe that jobless claims may decline soon as Omicron peaks in the U.S.
“We expect claims to gravitate back to the 200,000 level or lower once the Omicron wave passes, and there continue to be encouraging signs that the surge in new cases has passed its peak,” said Oxford Economics’ Nancy Vanden Houten in a Thursday research note.