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Need for labor market flexibility

Michele Belot on

Quick re-matching of workers and jobs

As the pandemic shook the labour market, many workers became idle almost from one day to the next. Taxi drivers, restaurant serving staff, hotel staff, etc. are examples of service providers that are put on hold. In contrast, other services, such as delivery services, have faced a substantial increase in demand and have a hard time meeting the increase in demand in the short run.

It is rare to see a need for such drastic immediate adjustments in the labour market. At the same time, there exists a number of platforms providing on-demand services that are very flexible and can adjust well to fast and large variations in demand (such as Uber for example). Unfortunately, these platforms tend to be service-specific (e.g. taxi or food delivery) while now what we need is more flexibility in the nature of services offered on demand. For example, those working in the Horeca sectors should be able to help with the preparation of supermarket deliveries.

It should be relatively straightforward for existing platforms to create a specific sub-platform for matching temporarily idle workers to employers who have faced increases in demands.

In addition, one could think of a way of matching volunteers (such as young people) to elderly people for basic services such as food delivery. The goal here would be to minimize the needs for the elderly to leave their home and visit places that are open to the public.

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Who is at risk?

From Michele Belot:

The key role of essential workers in stopping the spread of the virus

While we are all becoming accustomed with recommendations to washing our hands regularly and to practicing social distancing, there is a concern that the virus can still spread widely through a minority of people who are in contact with a large number of members of the public and/or who handle goods that are passed on to others. Even if most of us comply with social distancing measures, the virus can continue to spread easily through a minority of people.

O*net, a US-based platform classifying professional occupations has developed a measure of the degree of exposure to diseases and infections. Of course, most of these professions are in the medical sector, where protective practices are already common.

There are however several other professions outside the medical sector that are likely to remain considered essential throughout the pandemic but where protective practices are less common and rigorous. Examples include:

  • Retail salespersons, concierges, restaurant staff, and cashiers.
  • Couriers and messengers
  • Home health aides
  • Workers involved in the preparation of deliveries of goods
  • Bank and post office receptionists
  • Plumbers, handymen
  • Police

It is imperative that those in these professions follow the WHO and professional guidelines, including wearing a protective mask, washing hands regularly, and between every interaction with members of the public. Wearing gloves without disinfecting them between interactions may protect the worker but will contribute to spread the virus to members of the public.

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Wear a mask

From Jan Kulveit: A very inexpensive and effective mitigation measure is the compulsory wearing of masks. This has been implemented in several Asian countries. Masks do not protect the wearer – but they protect from infection by pre-symptomatic and asymoptomatic individuals. They also remind everyone of the need for distancing and lack of a mask is a signal of someone not taking the situation seriously and so should be avoided. Additional policy recommendations from his group here.

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Cheap and effective interventions

From Jan Kulveit: important, functional and cheap interventions.

  • Compulsory wearing of masks: Unfortunately the debate about masks was led completely astray by discussion about whether they are effective as protection of the wearer, and by the attempts of many governments to prevent hoarding by spreading the idea that masks are not effective as personal protection. However, the main benefit of everyone wearing masks is completely different: the mask limits the transmission from infected individuals. What’s crucial this works even in the pre-symptomatic period, and for asymptomatic individuals. So the wearer mainly provides a public good. Additional benefits are in encouraging behavioral changes. Masks remind everyone of the need for distancing. They are also great for signalling: people who are not taking the situation seriously don’t wear masks, or don’t wear them properly, and make it easy for everyone avoid close proximity with them. For how to get 10M people wear a mask in 2-3 days by promoting DIY efforts read here.
  • Scalable contact tracing solution based on use of telecommunications data: Here is how it works. Anyone infected is interviewed by an operator to track their past contacts. The operator is using our Memory Map, which includes telco data, banking data, phone location history and other sources to help the patient remember their whereabouts and contacts. All with user’s consent and within GDPR. New suspected cases are then invited by SMS to be tested. We are already extending this further to more data sources, mobile apps etc. The system was launched here in Czechia in one week including the necessary emergency legislation and the setup of the call centre. It is packaged and can be rolled out to other countries.

Both of these interventions are very cheap and effective. They have been effectively used in several Asian countries. Outside of Asia the only place implementing them I’m aware of is Czechia and Israel, and possibly Slovakia.