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Record number of workers calling out sick is slowing the economic recovery

Alexis Christoforous
·Anchor
·3 min read
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The labor market is being hit with a double whammy: high unemployment and a record number of workers calling out sick. Nearly 1.8 million workers were absent in November because of illness, slightly less than the record 2 million who called out sick in April, according to the U.S. Department of Labor.

Whether it’s because they have COVID-19 themselves, are afraid of getting it, or are caring for someone who already has the virus, the number of Americans who have missed days at work has hovered around record levels during the pandemic.

Michael Gapen, Chief U.S. economist at Barclays, told Yahoo Finance that all that missed work is leading to supply chain disruptions and is slowing the rebound in the manufacturing sector.

“You can see this anecdotally through the ISM (Institute for Supply Management) report that was released in November,” said Gapen. “It had many anecdotal responses that included things like difficulty re-arranging work spaces to get production done, worrying about labor shortages because either workers are infected or have to be quarantined because they were in close proximity of someone who was infected, and it’s limiting the ability of the sector to rebound and satisfy household demand for goods.”

Gapen said the vaccine rollout should start driving down absenteeism later this year, when more of the general population will begin to receive the shot.

“The goal is to get most of the at-risk population vaccinated by the end of the first quarter,” said Gapen. “That includes health care workers, teachers, fire and police, and probably, you would think near the top of the list would be manufacturing workers.”

LAKE SUCCESS, NY DECEMBER 14: (NO SALES TO NEW YORK DALLIES) First Covid-19 Vaccine shots given in the United States at Long Island Jewish Medical Center, part of Northwell Health, Dr. Michelle Chester administers the Pfizer-BioNTech COVID-19 vaccine on Dr. Yves Duroseau, 29 who is the second person in the Nation to get the Covid-19 Vaccine at Long Island Jewish Medical Center, Monday, Dec. 14, 2020, in the Queens borough of New York. People: Vaccine Credit: Hoo-me / MediaPunch /IPX
Dr. Michelle Chester administers the Pfizer-BioNTech COVID-19 vaccine on Dr. Yves Duroseau, who is the second person in the U.S. to get the Covid-19 vaccine at Long Island Jewish Medical Center, Monday, Dec. 14, 2020

Pre-pandemic, 90% of workers admitted they would sometimes go to work even if they were sick, according to a 2019 study by staffing firm Accountemps, but new rules around COVID-19 and the workplace changed that.

Last year’s Families First Coronavirus Response Act required certain employers to provide their employees with paid sick leave or expanded family and medical leave for specific reasons related to COVID-19. The latest stimulus bill signed by President Trump extends the act through March 31, though this time it makes paid leave voluntary for employees rather than mandatory.

Everything from automotive plants to meat plants are feeling the impact.

Last summer General Motors (GM) put white-collar workers on the production floor to deal with high absenteeism in order to keep up with soaring demand.

Workers leave the Tyson Foods pork processing plant in Logansport, Ind., Thursday, May 7, 2020. The plant was expected to reopen Thursday after closing on April 25 after nearly 900 employees tested positive for the coronavirus. Workers won't be able to return to work until they get tested. (AP Photo/Michael Conroy)
Workers leave the Tyson Foods pork processing plant in Logansport, Ind., May 7, 2020 after nearly 900 employees tested positive for the coronavirus. (AP Photo/Michael Conroy)

Tyson Foods’ (TSN) CEO Dean Banks said on a recent earnings call that workers calling out sick has “increased the cost and complexity of our operations” and he expects that trend to continue this year.

“The absenteeism effect and any negative consequences on the supply chain and production would likely extend into the second quarter, but should abate as we move into the third quarter,” said Gapen. “It will weigh negatively on Q1 growth a bit, but it’s not preventing the economy from recovering, it’s just slowing the growth rate.”

Alexis Christoforous is an anchor and reporter for Yahoo Finance. Follow her on Twitter @AlexisTVNews.

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