The labor shortage that is hitting the U.S. as the nation rebounds from the pandemic is also coming to Europe, where it could prove even more difficult to fix. Like the U.S., Еurope will struggle to match workers with jobs. That’s despite unemployment at more than 7% in the European Union which isn’t predicted to return to pre-crisis levels before 2023.

In the short term, coronavirus travel restrictions mean workers can’t cross borders as easily as usual within the 27-nation bloc. That’s a problem because the EU is about to start dishing out its 800 billion-euro recovery fund, which is focused on environmental and digital industries that will require specialized workers.

But the networks and pipelines that provide new workers have also been disrupted, which will have a lingering impact. Job fairs have been canceled and vocational training programs upended. Universities have seen a slump in foreign students. That will all exacerbate the existing challenge of the region’s unfavorable demographics.
Brexit has imposed an additional barrier to movement of labor, because the trade deal between the U.K. and EU that started this year includes restrictions on movement and only limited mutual recognition of some qualifications.

Systems for matching skilled workers with the companies will also ultimately be rebuilt. But that will take time, and the delay will exacerbate a problem that Europe was struggling with even before the pandemic -- an aging population. Germany’s workforce, for example, is projected to shrink by about 4 million by 2030 as the baby-boomer generation retires.

That poses a political challenge for governments. They may find themselves under pressure to double down on attracting foreign workers despite high local unemployment, the Brussels-based Migration Policy Institute Europe reported.

Source: Bloomberg