Some economists believe the Omicron wave will pose a clear risk of wage increases this year as the growing number of cases threatens to disrupt Australia’s economic recovery.
Jim Stanford, economist and director of the Australia Institute-based Center for Future Work, shared insight into the chilling impact of the Covid-19 Omicron variant on labor markets and future wage gains. He tweeted that it was ironic that as the pandemic wipes out the labor supply, wages seem to be going nowhere.
Economists had predicted wage increases of more than 2% in 2022, after years of stagnant wage growth. However, these forecasts are expected to be stalled until 2023, as economic activities fall to new lows due to further labor shortages and supply chain bottlenecks caused by the Omicron wave.
Most economists fear a return to lockdowns due to the growing number of Covid-19 infections, which will further derail the recovery and block salary increases this year. Employment in several regions has been affected due to the explosion in the number of cases and isolated close contacts.
Claudia Sahm, economist and former director of macroeconomic policy at the Washington Center for Equitable Growth, and section chief at the US Federal Reserve Board of Governors, retweeted research shared by Dr Cecília Tomori, anthropologist and public health specialist , on the Centers for Disease Control and Prevention (CDC) which identified the potential for a rapid increase in Omicron infections in the United States which was modeled in a December article.
The agency discovered a combination of factors responsible for the exponential increase in Omicron cases across the world, namely its high transmissibility and the variant’s ability to evade immunity provided by a past infection or vaccination, generally called immune invasion.
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The results of the scenario analyzes also indicated a sharp increase in cases in the coming weeks and a daily peak in new infections that exceeded the previous weeks in January of this year. This would automatically translate into an increase in hospital demand in the United States, despite a reduced severity of cases due to the large number of cases over a short period of time.
Catherine Swift, economist and former chair of the board of directors of the Canadian Federation of Independent Business (CFIB), shared an article on Canada’s healthcare system being costly at best and without exception, even before the Covid pandemic. 19. She tweeted that the glaring problems that have arisen from the virus crisis should convince Canadians that major structural reforms are needed and that spending public money on its own will not help fix the instability of the system. health.
Experts argue that Canada has been in a state of denial that people spend more on health care and perform poorly compared to many other advanced countries. However, the recent surge in infections caused by the highly transmissible variant of Omicron has exposed serious problems with the system with increasing hospitalizations and severe shortages of nurses and staff.
The overwhelming rise in infections in recent weeks has not only pushed many frontline workers into quarantine, straining healthcare systems, but has also prompted them to quit early in their careers. Provinces like Ontario and British Columbia, for example, have postponed elective surgeries due to understaffing. Likewise, many clinics and hospitals in remote areas have been forced to temporarily close and transfer patients elsewhere.
Canadians are expected to pay 25% more for health care than the Organization for Economic Co-operation and Development (OECD) average, as the recent increase in coronavirus cases is straining its healthcare system.