"Labour shortages have been rising steadily since recovery from the 2008-10 financial crisis, driven by increased demand and transitions in the labour market – digital, green and demographic. Covid-19 exacerbated the situation through a shift in workers' preferences, followed by growing demand in the post-Covid rebound. While these shortages are bad for the economy and can worsen working conditions for workers, they also offer opportunities in terms of bargaining power. While much of the ongoing debate focuses on the issue of specific skills shortages and possible solutions through reskilling/upskilling or expanding the labour force, primarily by migration, it is increasingly recognised that shortages are aggravated by bad quality jobs and that raising job quality is a way to compete for labour. Labour shortages may therefore increase workers' bargaining power, offering some counterbalance to the trends in the last decades of reductions in workers' relative power. This paper describes the link between labour shortages and job quality, particularly wages, at aggregate and individual levels. Wages indeed tend to be higher in sectors with higher labour shortages, and particularly so for workers with more vulnerable backgrounds – by gender, migration status or age – or lower bargaining power through less institutional support. When considering wider job quality there is some indication that work-life balance and the prospects of training, skills and career development are negatively affected by labour shortages. However, stronger worker representation can shield workers to some extent. This paper points out the complex relation between labour shortages and workers' job conditions and bargaining power."

Support: Digital;Paper

ISBN (PDF) : 1994-4454

Legal deposit : D/2024/10.574/23