Transformed Version
"It's still early to tell, but I'm worried," said Raimondo during an interview with CNN in her Washington office. "We know that people are anxious about going back to work."
Raimondo acknowledged that several U.S. companies are grappling with a "labor shortage."
"Part of it is that people are anxious about going back to work," she said. "In production facilities, people work closely together, and there have been outbreaks. We're having issues when people work in close proximity."
The outbreak of the Delta variant aggravated supply chain issues early in the year, leading to the closure of computer chip and other factories, particularly in Asia.
"It's still early to tell, but I think it's true – not just because of the outbreak, but because people are anxious to emerge," Raimondo continued. "It's really disruptive."
Vaccination
"I've said it many times: Get vaccinated. If everyone gets vaccinated, it helps a lot," Raimondo said. "If 95% of Americans were vaccinated, I'd be less concerned as there would be no suspicions."
Raimondo acknowledged that the complexity of supply chains meant that the issue was a global one, meaning that an outbreak in one place could lead to higher prices and job losses in the U.S. Car prices, for instance, soared to their highest levels since the 1970s in October due to auto manufacturers' inability to obtain the necessary computer chips for their vehicles.
Inflation's Core
At a hearing this week, Jerome Powell, Chairman of the U.S. Federal Reserve, admitted that they were surprised by the magnitude and impact of supply chain disruptions caused by the Coronavirus pandemic.
"What we missed in terms of inflation was the supply-side problems," Powell said. "These disruptions are unusual, non-linear, and difficult to predict."
Raimondo agreed with Powell's assessments.
"It's complicated. That means it's hard to fix quickly," Raimondo said. "There are issues on all fronts: raw materials, labor, logistics, increased demand."
As supply chains continue to face pressure, Biden administration officials recently highlighted recent positive developments.
The White House announced this week that the number of container ships that have been idling at terminals for nine days or longer has dropped by 41% since November 1st, falling to 75,000. According to market research firm IRI, supply is now 90%, just 1% below where it was in February 2020.
"People are still nervous"
Joshua Bolten, CEO of Business Roundtable, said that supply chains were slowly "opening up." The Business Roundtable is an influential lobbying group of U.S. business leaders. However, he added that this was happening "much slower than they'd have liked," referring to the CEOs of its member companies.
While pressure on supply chains has eased, the Business Roundtable's concerns reflected those voiced by Raimondo.
"They're worried that something like Omicron could lead to a setback," Bolten said.
Meanwhile, several factors beyond the supply chain contributed to a significant slide in consumer sentiment, including high inflation and rising gas prices. Despite a strong job market, Americans often rate the U.S. economy poorly in surveys.
Raimondo, the former Governor of Rhode Island, said she was not frustrated by the surveys as they reflected the reality.
"I'm not frustrated because... that's how people feel. People are still nervous and anxious. I think that's largely due to COVID-19," she said. "Every time we think we're past it, there are new mask rules. Every time we think we're out and about, a new variant pops up. That creates a certain sense of uncertainty. From my time as Governor, I know that uncertainty translates into survey results."
Raimondo expressed optimism that the uncertainty would pass within a year and that people would feel better.
"It's all temporary," Raimondo said. "But it doesn't feel good right now."
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The business community is concerned about the potential impact of Omicron on employee attendance and supply chain disruptions.
Raimondo highlighted that various businesses in the United States are facing a "labor shortage" due to employee reluctance to return to work.
Source:
Enrichment Data:
The Omicron variant of SARS-CoV-2 could significantly impact employee attendance and supply chain disruptions by increasing the number of infected employees and straining global supply chains.
- Employee Absenteeism:
- Increased Infections: With a higher transmissibility rate, the Omicron variant could lead to a surge in COVID-19 cases among employees, resulting in higher absenteeism rates.
- Workforce Reduction: To mitigate the spread, some businesses may be forced to reduce their workforce, compounding staffing shortages.
- Supply Chain Disruptions:
- Global Supply Chain Impact: The Omicron variant could trigger global supply chain disruptions as countries enact stricter health measures, such as lockdowns or travel restrictions, affecting industries that rely on just-in-time inventory management.
- Labor Shortages: Similar to the impact on employee attendance, supply chain workers might also be absent due to illness or fear of infection, further straining the already fragile supply chains.
- Economic Consequences:
- Economic Slowdown: The combined effect of increased absenteeism and supply chain disruptions could lead to an economic slowdown, as businesses struggle to maintain operations and meet customer demands.
Businesses should adapt by implementing various mitigation strategies to maintain operations and ensure continuity, such as remote work policies, enhanced safety measures, and supply chain diversification.
