This summer, when COVID-19 restrictions were eased in the northern hemisphere, little money was released from eurozone banks, as Italian account holdings continued to grow while US bank balances remained steady. According to European Commission figures, summer shopping has not grown much, and the United Kingdom has stated that its citizens are still especially willing to save. Likewise, the consumer mood index of the world’s biggest economy, the United States, fell sharply last summer. Since the beginning of the COVID-19 outbreak, total bank deposits in the United States have climbed to almost $1.98 trillion, aided by government subsidies, while they have increased to more than €400 billion in the eurozone. Despite the European Central Bank’s warnings about a downturn in eurozone consumer growth, many economists believed easing credit limits would help the European and US economies rapidly rebound. Consumers’ unwillingness to spend €2.38 trillion on savings in Europe and the US, however, has sparked worries about short-term stagflation, which might lead to a longer-than-expected recession and make a recovery from the pandemic’s economic slowdown more difficult. Given that growing global energy prices have pushed inflation to new highs in Europe and the United States, some economists argue that the absence of significant consumer growth in Europe and the United States is due to concerns about a long-term inflationary cycle. Customers may have been hesitant to spend their money due to concerns about the reemergence of COVID-19, their job security, and changes in spending habits during the COVID-19 pandemic. Constantly avoiding spending may cause cash to pile in bank accounts due to work-related anxiety, further delaying the possibility of rapid career advancement by depending on rising prices and growing sales. Meanwhile, two major concerns that have severely impacted the economies of western countries in recent years are industrial chain disruption and a labour shortage. Today, many Americans are leaving their employment willingly, resulting in a significant surge in labour demand. According to CNBC, a recent analysis by a group of economists from ING, a global financial institution of Dutch origin, about the impact of labour shortages on the economies of the United States, the United Kingdom, and the European Union revealed that the crisis was triggered not just by the COVID-19 pandemic and global lockdown, but also by structural changes in these ailing economies. They argue that demographic factors such as population ageing and birth rate declines are the key drivers of labour shortages in the nations studied. Another reason is the imposition of border restrictions on migrants as a result of the COVID-19 outbreak. On the other hand, many British citizens would rather work in a higher-paying job with more flexible working hours than endanger their health, and therefore voluntarily resign; the decision is quite evident since they have saved enough money in the months leading up to and during the lockdown. According to the study, households in the United Kingdom have amassed adequate savings throughout this period and are not in a rush to return to work. Moreover, many people fled from cities to suburbs during the pandemic, rendering them impossible to work in the cities again, and others prefer to retire early or make use of retirement benefits to avoid daily labour.
This is especially true when considering the effect of labour shortages on local and global production and distribution networks, which causes delays in product and service delivery to consumers and stymies global economic recovery. According to the most recent US Bureau of Labor Statistics report, the need for employees to leave or change jobs has surged. Despite 4.3 million job losses, the US government announced 10.4 million new available jobs between mid-August and mid-September, a figure not seen in the preceding two decades, and many employers have increased wages to attract more employees. Despite this, Americans continue to refuse to return to work. Food and shelter services, wholesaling, and public education are the industries most affected by labour shortages in the United States. Furthermore, during the pandemic, many foreign workers, mainly Pole drivers, whom the British labour market primarily relied on upon, returned to their home countries, causing the UK’s employment market to suffer in recent months due to Brexit. In recent weeks, shortages of workers in vital industries such as meat processing, agriculture, and transportation have disrupted consumer markets and scared consumers in the United Kingdom. The British government has finally decided to issue temporary visas to foreign truck drivers, livestock, and poultry workers, as well as provide incentives such as higher wages, to attract people to vital industries such as tourism, following a shortage of fuel at gas stations and fears of the loss of thousands of livestock. Meanwhile, as the Christmas season approaches, food and service prices are set to climb throughout the UK in the coming weeks.