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Real Wages Fail to Keep Up As Inflation Bites

Real wages are falling, despite the pay hikes over the past three years. While nominal wages have increased 9% in the U.S. since March 2019 off the back of a hot labor market, when paired with the impacts of the pandemic and inflation of 8.6%, real incomes are down by 1%. 

For employers, recession and inflation leave little room for continued wage hikes. Yet, companies are scrambling to fill vacancies. Job openings still outnumber the number of people looking for work by almost two to one, according to U.S. jobs data. 

To attract and retain workers, employers need to cater to the changed needs and demands of the post-pandemic workforce. More than eight in 10 employees said they would forgo a pay increase in return for other benefits — the top benefit being more control over their work schedule, according to a Mercer study. 

More well-being benefits and the ability to work from anywhere were also highly desired. Companies in the U.K. are experimenting with a four-day work week, and employers putting programs in place to support caregivers show how firms are trying to respond to a broader set of employee needs to remain competitive in the talent market. 

Survey: Employee Engagement Continues to Decline

A barrage of headlines in recent years containing phrases such as “quiet quitting” and “Zoom fatigue” may have put a clever name to the feelings employees were experiencing at work. A recent study by Gallup provides some concrete numbers that may explain why words such as these can carry weight. 

In its latest employee engagement analysis, Gallup found a continuing downward trend in how engaged employees feel in their jobs — dropping from 36% of employees in 2020, to 34% in 2021, to 32% in 2022. 

Gallup measures engagement by asking respondents about how well their organizations respond to various needs, which include: having clear expectations, feeling heard and included, feeling supported in growth and development, and even cultivating friendships at work.   

Since 2019, these engagement elements have declined the most: 

  • Clarity of expectations
  • Connection to the mission or purpose of the company
  • Opportunities to learn and grow
  • Opportunities to do what employees do best
  • Feeling cared about at work  

Researchers advise that, above all, leaders clearly communicate their expectations for employees. A lack of clarity can lead to workers feeling confused and unsure of how to achieve their goals and possibly disappointment come review time because of this misalignment.

“People often believe that being overworked is the biggest driver of burnout, but that’s not true,” said Gallup CEO Jon Clifton. “It is a significant driver, but the biggest driver is perceived unfair treatment at work.” 

GDP Growth, Low Unemployment Belies a Growing Food Insecurity Problem in the US

Food insecurity rate in the U.S.

Source: Morning Consult

With the latest GDP report showing a second consecutive quarter of growth in the U.S., and with inflation gently slowing, concerns for an imminent recession may be pushed further into the future. 

But while some of these figures, including a continuing strong labor market, show positive signs for the economy, many still feel the pain when it comes to purchasing basic necessities. 

A recent survey from Morning Consult shows that a growing share of Americans experienced food insecurity in the past year. In December 2022, 15% of U.S. adults said they “often or sometimes did not have enough food to eat,” compared with 10% in December 2021. The authors said this accounts for a “notable rise after a year of persistent price increases.”  

Globally, over 770 million people were undernourished in 2021, according to the most recent data from the U.N.’s Food and Agriculture Organization (FAO). Last year, food prices rose to record levels as the Russian invasion of Ukraine destabilized supply chains, as measured by the FAO Food Price Index.

 

Chinese Travelers Are Ready to Venture Outside of the Mainland in 2023

The day after China announced it was lifting its travel ban, outbound flight bookings increased 254% overnight, according to the Chinese travel company Trip.com. After nearly three years of COVID restrictions and lockdowns, eager Chinese tourists are ready to dust off their travel documents again.

A new survey of would-be travelers in Mainland China reveals that nearly 60% want to travel outbound in 2023, while 40% would either stay home or travel domestically, according to the research firm Dragon Trail International.

The top seven destinations outside of Mainland China that tourists plan to visit are in Asia, with Hong Kong, Macao and Thailand leading the top three spots. At No. 7, France was the top destination in Europe, with Australia and Russia rounding out the top 10.

Although some experts note that rising inflation and interest rates may curb demand for travel in 2023, hospitality operators should prepare for an uptick in these new travelers later this year. Survey respondents said they are planning a return to tourism in late summer (42%) and mid-autumn, around China’s national Golden Week holiday (32%).

Analysis: COVID Cost Employers $213 Billion in Lost Hours in the US

Roughly 6.6 billion hours were lost over two years due to the pandemic, according to a new report from the Integrated Benefits Institute. Researchers estimate the cost associated with those hours to be $213.1 billion ($167.4 billion in the first year and $45.7 billion in the second).

According to its analysis, the industries that suffered the most economically were educational services, health care, and social assistance ($30.8 billion); public administration ($27.1 billion); construction ($23.9 billion); waste management services ($22.4 billion); and manufacturing ($21.5 billion).

The top reason for lost hours include economic issues, accounting for 44% of the reasons in year one and 36% in year two. Examples of economic issues include slack (or slow) work, business conditions, or workers could only find part-time work. The report cites an example of slack work or business conditions as a “temporary closure due to the pandemic.” 

Data from two years prior to the pandemic shows that economic reasons accounted for 36.3% of lost hours, indicating that the sharp increase in year one of the pandemic had almost completely receded in year two, when the researchers note a spike in personal leave instead.

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