MainStreet Macro: The Global Workforce Speaks

We’ve spent much of MainStreet Macro’s first four months tracking the economic recovery and unprecedented changes in employment due to the coronavirus pandemic.

This week, we shift gears to hear from workers themselves about how their attitudes and lives have adjusted.

From October to December 2020, the ADP Research Institute conducted a workforce survey of more than 32,471 people in 17 countries. We asked about their feelings, opinions, and experiences.

It’s no surprise that job loss and pay cuts have had an impact. Globally, 64% of workers were hurt professionally by COVID-19. Twenty-eight percent lost a job or were furloughed, and 23% took a pay cut.

Gen Z, that cohort of young adults aged 18 to 24, were the hardest hit, with a staggering 78% reporting a job loss or pay cut.

The survey also uncovered different regional and national experiences.  

In the U.S., 28% or workers reported a job loss or furlough and 14% reported a pay cut. Compare that to India, where 39% of workers were unemployed and 30% took a pay cut.

Italy is interesting. Job losses and furloughs were very low, at 9%, while pay cuts were relatively more common, at 20%.

Despite it all, workers see a brighter future. The great majority–86%–say they’re optimistic about the next five years. That’s down from a year earlier, before the pandemic struck, but still a sign of remarkable resilience.

Here are some reasons for that optimism — and some thoughts on what those other 14% might be worried about.

1: Workers are on the move:

The pandemic shifted where and how people live, with three in four workers either changing their living arrangements or planning to. Among Gen Z workers that number rose to 85%.

One reason people can live differently is because they’re working differently.  Two-thirds of the global workforce felt empowered to take advantage of flexible work, up from 26 percent before the pandemic. And nearly half of employees said their managers were more flexible than company rules dictated.

Employees believe that remote work benefited their employers, too. Only 10% of remote workers said productivity was a challenge, compared to 13% who continued to do their jobs on site. Interestingly, hybrid workers, at 15%, found it most difficult to maintain productivity.

I expect workers’ easy relationship with remote work to fade over time. Three in five workers said they felt judged for taking advantage of flexible work, and 62% felt that they were monitored more closely by their supervisors.

2: Unpaid overtime is soaring

Given the tremendous job losses, it’s no surprise workers are uneasy. Feelings of job insecurity were nearly universal, with 85% of respondents expressing worry.

That fear might have led workers to put in longer hours and take on additional tasks as they sought to improve their prospects. In January, unpaid overtime jumped sharply to 9.2 hours per week on average, up from 7.3 hours just a year ago.

The longer hours, too, might be the result of a genuine increase in workload. Among survey respondents globally, 46% said they had taken on additional responsibilities due to pandemic-related job cuts at their organizations.

One in 10 workers globally now are working more than 20 hours a week for free!  That’s double the 1 in 20 that put in 20 hours of unpaid overtime before the pandemic.

Unpaid overtime jumped everywhere. But the most dramatic increase was in North America, where the average number of free hours worked more than doubled in just one year.

3: Pay disparity is laid bare

The good news is most employees have been rewarded financially for their commitment, with nearly 70% reporting a pay raise or bonus.

But North America stood out again, this time for gender pay disparities. Among workers who took on additional responsibilities or changed roles due to the pandemic, 63% of men in the U.S. and 52% in Canada received a pay raise or bonus.

By contrast, only 51% and 37% of women in the U.S. and Canada, respectively, reported higher pay – the largest gender gap of any region. 

Pair that with the disproportionate impact of pandemic job losses on women. Serious work is needed to draw them back to the labor market — and ensure equitable pay for those who never left.

My Take:

COVID-19 took a heavy toll on many businesses and workers, but during a time of extraordinary upheaval, workers and employers alike have largely stepped up to the mark.

And as we look forward to the April jobs report on Friday, the economic outlook has brightened considerably in many parts of the world.

In the U.S., the economy is prancing like a show pony before adoring fans. GDP for the first three months of the year leaped to 6.4% annualized, consumer spending hit its stride and bounced up to 10.7%, leaving the economy just 1% shy of its pre-pandemic peak.

President Joe Biden’s $4 trillion in infrastructure and family-related spending, and Federal Reserve Chair Jay Powell’s reassurance that the central bank’s easy monetary policy will continue, will keep the economy trotting along.

Even jobless claims, while still stubbornly high, are moving in the right direction.

With good news in abundance, let’s use this week to reflect on what the pandemic has done to the world of work. A full jobs recovery will come eventually, but the workplace might never be the same.