Reshuffling Labor Markets

The future of labor will represent a barometer of structural shifts in the wake of the COVID-19 virus pandemic. With labor-market tightness across major markets expected to persist but ease slightly where recessions take hold in 2023, we expect any slowing in wage growth to be limited.

Labor markets are experiencing a great reshuffling. Shortages in labor supply across large markets and for key sectors tied to supply chains, have prompted a tilt in negotiating power toward workers. As a result, we are seeing growing unionization and increasing strike activity. Entering 2023, we expect tight labor markets and the inflationary environment generally to initially support strong wage growth globally.