Millions of Americans Are Calling In Sick, Stunting the Recovery

Amid the surge in the ranks of the unemployed during the pandemic, another crucial problem in the labor market has gone mostly overlooked: Workers are calling out sick in record numbers this year.

Whether it’s because they have Covid-19 themselves, are worried about getting it or are taking care of someone who already has it, the number of workers who’ve missed days on the job has doubled in the pandemic.

What’s more, unlike the jobless rate, which has steadily declined from its April peak, the rate of abseenteism -- as it is called by economists -- has remained stubbornly high. Almost 1.8 million workers were absent in November because of illness, nearly matching the record 2 million set back in April, according to Labor Department data.

Millions of Americans Are Calling In Sick, Stunting the Recovery

These lost days of work are sapping an economic recovery that’s been progressing in fits and starts for much of the past several months. While some indicators have improved markedly, others such as retail sales and consumer spending and incomes have weakened as the pandemic rages on and local governments impose fresh restrictions on businesses and travel.

Michael Gapen, chief U.S. economist at Barclays Plc, said that the vaccine could start driving down absenteeism by the second quarter. Until then, he said, the missed work is leading to supply chain disruptions.

Absenteeism “could lead to shortages, it could lead to higher prices and more restrained output,” Gapen said.

With about 1.5 million new cases per week and deaths at a record pace, employee absenteeism may remain elevated for some time, especially in early 2021 before vaccines are widely distributed and with the rollout in the U.S. moving slower than government officials expected.

Factory Workers

While the Labor Department data tracks people currently in the labor force who are out sick, a separate survey by the Census Bureau captures an even wider view of the challenge. Its latest Household Pulse Survey -- based on responses in late November and early December -- estimates that more than 11 million people weren’t working because of the virus. The figures also include those who refrained from working because they were worried about getting or spreading the virus, and those caring for someone with symptoms.

The effects of missing workers are especially concentrated in manufacturing. Absenteeism, combined with short-term shutdowns to sanitize facilities and difficulties in returning and hiring workers, limit the sector’s growth potential, according to Timothy Fiore, chair of the Institute for Supply Management’s Manufacturing Business Survey Committee.

The group’s gauge of factory activity grew at a slower pace in November, with the employment component falling back to a level that indicates contraction.

“It’s not a lack of work,” Fiore said on a recent call with reporters, noting absenteeism especially for low- to medium-skill roles. “It’s a lack of people.”

In addition to temporarily absent workers, the manufacturing sector has 525,000 job openings, the most in Labor records back to 2000.

Millions of Americans Are Calling In Sick, Stunting the Recovery

Auto plants are feeling the effects. General Motors Co. put white-collar employees on the production floor in August to cope with high absenteeism amid strong demand. Volkswagen AG Chief Financial Officer Frank Witter has said high levels of missing staff left the automaker “at times struggling to get all the cars built for customer orders.”

U.S. businesses have reported that surging cases precipitated plant closings and infection fears, adding to labor challenges including absenteeism and attrition, according to the Federal Reserve’s latest Beige Book summary of economic conditions. Manufacturers in the Chicago region have used overtime to make up for staff shortages, the Dec. 2 report said.

Sick Leave

For office workers, 90% of professionals said before the pandemic they’d sometimes go to work sick, according to a 2019 study by staffing firm Accountemps. Covid changed the conversation, and more employees are staying home to protect themselves and others.

The Families First Coronavirus Response Act earlier this year made the decision to stay home easier for some Americans by allowing two weeks of paid sick leave for certain employees. The law also allows leave for those unable to work because they must care for a child.

The latest stimulus bill, signed by President Donald Trump on Dec. 27, includes an extension of the act through March 31, but makes paid leave voluntary for employers rather than mandatory as it was in the first iteration. That may continue the trend of workers staying home depending on how many employers choose to grant the leave.

The act, however, excludes essential workers, which means those employed at facilities such as meatpacking plants can’t take advantage of the policy. That in turn can lead to workplace outbreaks and further disrupt production.

With fewer employees at work, slaughter rates at U.S. meat plants fell in the third quarter. Tyson Foods Inc. Chief Executive Officer Dean Banks said on a recent earnings call that absenteeism has “increased the cost and complexity of our operations” and that the company expects that to continue in 2021.

©2021 Bloomberg L.P.

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