{"id":13435,"date":"2021-07-23T15:57:16","date_gmt":"2021-07-23T14:57:16","guid":{"rendered":"https:\/\/www.economicsobservatory.com\/?post_type=question&p=13435"},"modified":"2022-03-24T14:30:22","modified_gmt":"2022-03-24T14:30:22","slug":"the-new-normal","status":"publish","type":"question","link":"https:\/\/www.economicsobservatory.com\/test\/the-new-normal","title":{"rendered":"The new normal"},"content":{"rendered":"\n

Newsletter from 23 July 2021<\/strong><\/p>\n\n\n\n

In England, the week started with the arrival of the long-anticipated (by some) \u2018Freedom Day\u2019. Masks and social distancing became optional \u2013 although still encouraged \u2013 and nightlife was revived, with clubs reopening for the first time since March 2020. People enjoyed their new freedom amid a scorching heatwave, with temperatures hitting 33 degrees in some parts of the country. In all the warmth and revelry, at a glance, life appears to be on its way back to \u2018normal\u2019.<\/p>\n\n\n\n

But there are still many challenges ahead. Boris Johnson faced public backlash in response to the new policy<\/a> that will require proof of double vaccination to enter certain venues from the end of September. The prime minister also came under fire from former advisor Dominic Cummings, who spoke to the BBC<\/a> about the handling of the pandemic.<\/p>\n\n\n\n

To make matters worse, the ever-growing \u2018pingdemic<\/a>\u2019 saw the NHS app tell a record 619,000 people<\/a> to self-isolate this week, with a third of a million people testing positive. Self-isolation rules are also causing major headaches for many different industries. Bin collections have been postponed, restaurants have had to close and supermarkets have struggled to find enough staff to stock the shelves.<\/p>\n\n\n\n

Further down the supply chain, some meat production lines may have to shut temporarily, with several factories reporting that 10% of staff<\/a> have been told to stay at home. Similarly, the UK\u2019s biggest car factory reported that over 20%<\/a> of its staff must self-isolate.<\/p>\n\n\n\n

This is a huge problem for sectors where employees cannot work from home. Although double-vaccinated people will be exempt from isolation notifications from 16 August, several businesses are demanding that this date be brought forward to help ease current pressures.<\/p>\n\n\n\n

A hybrid future?<\/h3>\n\n\n\n

With Covid cases continuing to climb, how do the people that can<\/em> work remotely feel about returning to the office full-time? In a new piece this week, Larissa Marioni (NIESR) reports that the majority of people want a mix of home working and time in the office.<\/p>\n\n\n\n

A survey<\/a> from the Office for National Statistics (ONS) shows that people working from home enjoy a greater work-life balance, fewer distractions, and improved wellbeing. That being said, younger workers, usually earlier on in their careers, reported that remote working made it harder to collaborate with colleagues, and that there were more distractions.<\/p>\n\n\n\n

While it is up to businesses to decide how and where they want their staff to work, Larissa\u2019s article<\/a> suggests that hybrid working is likely to become the norm. For many, working from home has improved wellbeing by providing a better work-life balance as well as less time commuting. But in other cases this is counterbalanced by the lack of socialising and the onset of \u2018zoom fatigue\u2019 \u2013 where people struggle to focus on video calls. Changes in work patterns could have wider effects on the UK economy, from where firms are located to where people choose to live. This may have numerous policy implications for urban planning, housing markets and wider infrastructure projects.<\/p>\n\n\n\n

Unravelling the payroll data<\/h3>\n\n\n\n

Aside from changes in how and where people work, the pandemic has also affected employment levels. As measures ease, has the number of people in work recovered and, if so, has this affected the structure of the UK labour market?<\/p>\n\n\n\n

This week, Kate Lucas (University of Bristol) discussed the implications<\/a> of the latest payroll data from the ONS<\/a> for the UK\u2019s levelling up agenda. The data suggest that differences in employment across UK regions reversed during Covid-19, with London falling behind the rest of the UK. The numbers of employees in the North East, North West, East Midlands and Northern Ireland have risen to above pre-pandemic levels, but employment in London is still 3.2% below where it was in February 2020 (see Figure 1).<\/p>\n\n\n\n

Figure 1: Payrolled employees, percentage change since February 2020, June 2021 <\/h4>\n\n\n
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