Mon. Jan 24th, 2022

Businesses across the U.S. are temporarily closing or adjusting working hours as the number of Americans infected with Covid high all the time, which underscores how disruptions linked to the Omicron variant have washed through the economy.

Airlines, retailers, restaurants, hospitals and school districts are among those saying they are struggling to stay fully staffed because the current spate of infections has exacerbated an existing labor shortage by making many of their staff sick, or requiring them to stay home. must remain for quarantine. .

More than 5 million Americans – or 2 percent of the country’s total workforce – could isolate at home this week, according to an analysis by Capital Economics Senior U.S. economist Andrew Hunter.

“The Omicron variant is less lethal than previous strains, but even if it does not require the reinstatement of restrictions to mitigate the spread, the large number of new cases could still cause a significant blow to the economy over the next month or two. , as millions of workers are forced to stay at home, ”Hunter said.

Business leaders have been complaining for months that there has been a shortage of workers, especially in hourly roles that require personal work. Many were already employed with fewer staff than usual. Then the highly transmitted Omicron variant of the coronavirus emerged, which drove a spate of infections across the country and forced some of the remaining workers to report sick.

Airlines were among the first to adjust their operations. They have cancelled thousands of flights, starting over Christmas and continuing into the new year – the combined fall of winter weather and flight crews testing positive.

United Airlines said on Tuesday that 3,000 crew members tested positive for the virus, forcing it to reduce more flights. “In one day alone at Newark, nearly one-third of our workforce called out sick,” CEO Scott Kirby wrote in a note to employees.

Many U.S. airlines were affected: United canceled 9 percent of flights between Dec. 23 and Jan. 8, Southwest canceled 8 percent, Delta 5 percent and American 4 percent.

Among U.S. airlines, United, JetBlue Airways, Frontier, Alaska and Spirit airlines have cut their flight schedules for January the most, says Savanthi Syth, analyst at Raymond James.

United have agreed to give pilots up to three times their salary to operate extra flights during January. Spirit doubled flight attendants’ salaries between December 28 and January 4.

Staff shortages also forced retailers, including Walmart and Nike, to reduce their working hours, while the department store Macy’s reduced working hours on weekdays at all its stores for the month of January.

Starbucks also adjusts business hours, with some cafes in Manhattan closing at noon this week. “When a store experiences a temporary staff shortage, we respond by reducing hours to be aware that our partners are not overworked – to prioritize their health and well-being in our decision-making,” a Starbucks representative said in a statement. statement said.

Joel Bines, co-head of AlixPartners’ retail consulting practice, said several chains that attended an industry conference this week had reported problems manning their stores since Omicron hit the US.

“During the holiday season, even a handful of staff who have to stay home due to infection or exposure is enough to punch a pretty big hole in an already tense operating environment,” Bines said.

Calvin McDonald, CEO of Canadian athletics apparel manufacturer Lululemon, said “more limited staff availability and reduced working hours in certain places” was partly to blame for lower than expected income in the fourth quarter of last year.

Although retailers typically make fewer sales in January, and therefore require fewer staff, Bines said many are still struggling while dealing with the labor-intensive process of handling unwanted gifts brought back to their stores.

Suzanne Clark, CEO of the U.S. Chamber of Commerce, said Tuesday her members are also concerned about the impact short-term staff shortages will have.

“They are concerned about the impact on their brand when someone tries a new service or a new product for the first time and the service is not quite what they expected,” she said.

The disruptions are not limited to the private sector – many school districts are struggling to find enough teachers. The Parkrose School District in Portland, Oregon, closed Monday, citing staff shortages. It will reopen Wednesday for distance education and continue with virtual education until January 21st.

“We are seeing a significant increase in the number of staff and students who are ill,” Superintendent Michael Lopes Serrao wrote in a letter to parents on Monday. “This includes our staff who support the activities of our district: nutrition, maintenance and transport.”

In Waterbury, Connecticut, some schools will only be open for half a day this week to help “relieve the district of the current staff shortage and transportation problems affected by Covid-19” after it closed Monday.

Nearly a quarter of U.S. hospitals also face a “critical staff shortage,” the U.S. Department of Health and Human Services said, higher than at any time during the pandemic. New York’s Department of Health has ordered 40 hospitals in the state to stop performing non-essential elective surgeries for two weeks due to the limited number of beds available.

The US Centers for Disease Control and Prevention shorten the recommended isolation period for people who had Covid last month from 10 days to five days, hoping to alleviate staff shortages. But reports of business disruptions from the pandemic continued.

“Things are only likely to get worse in the near term,” Capital Economics’ Hunter said.

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