UWV: Economic recovery can be slowed by a lack of staff

UWV noticed that more companies are facing a staff shortage. Rob Witjes, a benefits agency labor market expert, argues that a shortage of workers can hinder economic recovery. “I am positive about recovery, but we are entering summer holidays with doubts.”

It was revealed that the Netherlands’ unemployment rate is now almost the same as before the corona crisis. This is good news. However, it is becoming increasingly difficult for companies to hire new staff. This applies not only to the sectors that have had a shortage of IT and education but also to inland shipping and retail.

Witjes said, “This can be an obstacle to further recovery of economy.” “Companies might be limited in their activities. They might decide to open only four days per week instead of five. Employers will also be less demanding. This may mean that you have to hire someone who does not possess the required diploma. However, it is possible to train them in-house.

Many layoffs were prevented by the Corona Support Package

Witjes is optimistic about the recovery of the economy from the shocks caused by the lockdown over the past months. “The government’s support package has been successful, including wage support and deferral tax payments. It has prevented many layoffs. In the delivery of meals, entrepreneurs have been innovative as well.

“We can see that the number companies who are requesting assistance from the government has dropped significantly since the outbreak of the pandemic in spring 2020. This shows that many businesses have now sorted their affairs and that the economy is resilient.

There will be an increase in unemployment

Witjes thinks that although this is true, it does not mean that unemployment won’t rise any time soon. The cabinet will end the corona support package to companies at the end September. After that, it is likely that some companies will go bankrupt or have to reorganize. This is similar to having to administer an anesthetic following an operation. There will be post-pains. They will also appear now.”

The psychological factor is another important consideration. What will people do if there is more unemployment and the delta variant of infection? If the number of cases rises, what happens if cabinet tightens its regulations? I imagine companies and consumers will be more cautious about spending. There are still many questions about the economic outlook.

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