How global labor markets
are recovering from COVID-19

Trend 1 of 3

Trend 1: Multiple indicators point to robust employment recovery.

Employment surged above prepandemic levels in September 2021; in total, 886,000 jobs were created in 2021. Full-time employment increased by 123,000 in December, while part-time employment is virtually unchanged relative to February 2020, suggesting that most of the jobs being created are high-quality.

Trend 2 of 3

Trend 2: Lack of skilled labor is likely to be a persistent challenge.

Many Canadians are taking the opportunity to reskill to seek better opportunities. In fact, many workers with a high school diploma have left the labor market, leaving fewer workers to fill the job vacancies in accommodation, food, and other services.

Trend 3 of 3

Trend 3: Canada’s most vulnerable population was hit hard by the pandemic.

Single parents, immigrants, and the Indigenous population were all hit the hardest by the pandemic. Lower-paid jobs were most affected, while employment levels for individuals with an hourly salary greater than $20 are now above prepandemic levels.

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Trend 1: The labor market remained relatively robust and acted as a stabilizer for the economy by shielding households’ disposable income.

Due to a large political stimulus and the introduction of short-term schemes that allow firms experiencing economic difficulties to temporarily reduce employees’ working hours while providing them with government income support, the labor market remained relatively robust.

Trend 2 of 3

Trend 2: An aging population will put additional pressure on an already-tight labor market.

Although Germany’s aging workforce is not a new phenomenon, estimates indicate that by 2030, the German workforce could be almost 7% smaller. As a result, more companies will have trouble finding skilled staff.

Trend 3 of 3

Trend 3: The types of jobs and skills in demand will likely change.

Occupations that require human interaction and empathy—such as health care, training, and management—will likely be in high demand. The overall result is that automation will likely not affect the labor shortage because demand will rise in labor-intensive sectors.

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Trend 1: Salaried jobs declined during the pandemic.

Salaried employees have witnessed the biggest fall in employment, with 11.7 million salaried jobs lost since January 2020. At the same time, employment has increased, primarily among small traders, wage laborers, and farmers.

Trend 2 of 3

Trend 2: The pandemic has had a disproportionate impact on youth employment.

Age-wise distribution of employment shows that the young working population, age 20–44 years, has been hit the hardest. Similarly, people older than 60 years have opted to retire during this period.

Trend 3 of 3

Trend 3: The labor market recovery has been fragmented across sectors, with a few service sectors doing consistently well.

Jobs in IT services (including exports) have rebounded due to global digitization initiatives. This sector has also witnessed a demand-supply mismatch, which has led to strong wage rises for IT workers.

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Trend 1: The demand for labor remains relatively weak in most industries.

Job openings and help-wanted ads are on the rise, but they are nowhere near prepandemic levels. However, goods-producing industries have recently shown signs of stronger demand, with job openings in agriculture, mining, construction, and manufacturing all above early 2020 levels.

Trend 2 of 3

Trend 2: Demographic challenges make labor supply a continuing challenge.

Despite the current low demand for labor, Japan’s shrinking population presents a challenge for employers. Japan earlier mitigated this by encouraging labor force participation, especially through policies and incentives targeting female workers. The participation rate might begin to rise again when pandemic-related disruptions ebb.

Trend 3 of 3

Trend 3: Are wages growing?

Perhaps the best way to determine if labor supply is lower than demand is to examine wage growth. Total cash earnings were lower than two years earlier—hardly a sign of a tight labor market. However, this year’s wage-setting negotiations between employers and unions could raise wages.

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Trend 1: More people have joined the labor force, but with lower wages.

As of Q3 2021, 60% of the workforce now earn up to double the daily minimum wage (412 Mexican pesos). However, the number of workers with higher wages has decreased, indicating that most of those who joined the workforce have moved to lower wage ranges.

Trend 2 of 3

Trend 2: Mexico’s informal sector was unable to absorb job losses in the formal sector.

Mexico’s informal sector has traditionally been countercyclical, absorbing some formal-sector job losses during recessions. However, during the COVID-19 crisis, the informal sector was unable to mitigate household income losses, due to the increase in both the economically inactive population and in underemployment.

Trend 3 of 3

Trend 3: Women have been experiencing greater difficulty finding employment.

The sectors most affected by the lockdowns are those where women are most frequently employed. Furthermore, women with lower levels of educational attainment faced even greater difficulties.

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Trend 1: One distinctive feature of the Spanish labor market is high temporary employment and high youth unemployment.

More than 20% of the employment in Spain is supported by temporary contracts (25% in the case of women).⁴ Youth unemployment is also high, just over 30% among people under 25, which indicates persistent structural issues.

Trend 2 of 3

Trend 2: Underemployment is another structural labor issue.

More than 50% of men that work part-time (3.4% of all male workers) and around 42% of women who work part-time (almost 10% of all women) wish to work additional hours but do not find the opportunity.

Trend 3 of 3

Trend 3: More jobs have been available in sectors with high pandemic-related activity.

The job vacancy rate decreased during COVID-19 but has recovered quickly, currently exceeding prepandemic levels but still below 2006–2011 levels. Sectors with activity fostered by the pandemic, such as health, information, and communication, have higher vacancy rates.

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Trend 1: Businesses have found it increasingly difficult to hire new employees.

Job vacancies have been running at record highs alongside falling unemployment. In the latest UK Deloitte CFO Survey, almost half of those surveyed reported experiencing significant levels of recruitment difficulties—especially in occupations such as hospitality, lorry driving, and agricultural work.

Trend 2 of 3

Trend 2: Transitory factors behind labor shortages should let up.

Recruitment difficulties can partly be explained by a significant drop in working-age adults’ labor participation. However, a more embedded recovery, with high vaccination rates, should bring workers back. Fresh graduates are also more likely now to enter the job market than remain in further education.

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Trend 3: Brexit and the pandemic are bringing about more lasting change.

While Brexit has limited the supply of low-skilled workers from the European Union, migration from non-EU nations has been rising significantly, with a resulting increase in non-EU workers. Local labor markets will take some time to reach a new postpandemic normal.

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Trend 1: Employers are finding it very difficult to find the right workers.

Normally as a labor market gets tight, the unemployment rate falls, and job openings increase. However, now at a given unemployment rate, employers appear to be having trouble finding the workers they need.

Trend 2 of 3

Trend 2: The drop in labor force participation was enormous—but not as much as anticipated for women.

At this point, it appears unlikely that over 2 million former workers will return to the workforce. Given the pandemic-related difficulties with child care and school closures, women in the 25–34 and 35–44 age groups actually had surprisingly higher rates of labor force participation.

Trend 3 of 3

Trend 3: The industries that faced the most difficulty in hiring have responded with the largest wage increases.

Industries with the most acute imbalances have been the most willing to raise wages—but higher wages have not been sufficient incentive to bring people back into the labor force.