Post-Covid hiring crunch forces businesses to dismiss degrees – leading macroeconomic influencers
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Post-Covid hiring crunch forces businesses to dismiss degrees – leading macroeconomic influencers

09 Jun 2021 (Last Updated June 9th, 2021 07:40)

Organisations are relaxing their college degree requirements to fill middle-skills jobs.

Post-Covid hiring crunch forces businesses to dismiss degrees – leading macroeconomic influencers
Credit: HDesert, Shutterstock.com.

Economists believe that the post-Covid hiring crunch in the US could be a turning point for academic inflation, marked by the need for businesses to revisit their policy positions and withdraw absolute rules such as hiring people with four-year college degrees.

David Deming

David Deming, economist and professor of public policy at the Harvard Kennedy School and director of the Malcolm Wiener Centre for Social Policy, retweeted a discussion on whether the post-Covid hiring crunch could be an inflection point for degree inflation in the US.

According to some experts, eliminating college degree requirements, especially for middle-skills job roles, could help businesses fill job vacancies, save money, as well as reduce employee turnover.

A 2017 Dismissed by Degrees study provides an overview of the increased interest in skills-based hiring. It highlights how the movement to cut unnecessary education qualifications was becoming popular among private employers before the Covid-19 pandemic hit in the US. The country was marked by record-low levels of unemployment and numerous unfilled jobs that gave workers more power in the labour market.

Constantin Gurdgiev

Constantin Gurdgiev, economist and former editor of Business and Finance Magazine shared an article on the Covid-19 economic recession being different than others in which corporate profits seem to be booming in the US. As a result, this could be signalling potential economic recovery from the damages inflicted by the pandemic.

Experts add that the passing of the recession has been both abnormal and dramatic, shifting expectations for the recovery to unusual levels. Reports suggest that market power of producers is rising from the beginning of 2020 till date, while non-financial corporate profits continue to boom till date and in the second quarter of 2021, indicating a healthier economy. The Covid-19 pandemic, as a result, has transferred wealth from the people to organisations who have managed to trade through the virus crisis.

James Picerno

James Picerno, a financial journalist and editor of the Capital Spectator blog, shared an article on the recent surge in US inflation, with hints of a peaking rebound after the pandemic lows suggested by the Inflation Trend Index (ITI), which provides guidance on pricing activity.

Economists believe that even though inflation is peaking, the pricing pressure can be endured. However, the debate over inflation is not yet over in the US, with the Federal Reserve arguing that the current increase in inflation is momentary and triggered by the economic rebound after the deep recession triggered by the pandemic. The alternative argument is that numerous factors will keep the economy running hot and hotter for a long time.

Deutsche Bank economists believe that inflation will continue to rise and that the Fed’s decision to endure this increase by waiving rate hikes is a threat to the economy. David Folkerts-Landau, Deutsche’s chief economist and his team for instance, state that the decision could create a deep recession leading to massive financial distress across the world, especially in the emerging markets.