US & Global Economic Impact Analysis and Forecasts

Freedonia analysts and economists are sharing their insights on how major events are impacting different parts of the US and global economies.

Vaccine Mandates: Early Requirements Kick In, Questions About Enforcement Arise

So far, most industries that have had COVID-19 vaccine mandates kick in haven’t seen the kind of mass exodus of employees that some predicted. From NYC restaurants to healthcare facilities, government agencies, and police and fire departments, some employees have chosen to leave rather than get the vaccine. However, the impact has been more muted than initially expected, often representing a few percent of staff rather than 30-40% some surveys indicated.

Will that continue to be the case as President Biden’s planned Medicare rule ­– which requires all staff at skilled nursing facilities to be vaccinated – and as the broader mandate applying to employees of businesses with 100 or more employees kick in?

There are questions about how these rulings will be enforced, particularly in areas where vaccine resistance remains high even among those in local or government or law enforcement agencies. OSHA – tasked with the job ­­– is understaffed for enforcement, with only 862 inspectors to handle all regulatory actions the agency is responsible for as of early 2020.

However, it seems that many companies are interested in remaining in compliance. For many, there are benefits to putting a mandate in place. Companies and agencies that are able to get their vaccine numbers higher see reduced time off requests and fewer surprise shutdowns (for illness or quarantine), both of which  make staffing shifts challenging. Higher vaccine rates can also inspire increased confidence among customers and employees that the location is a safe place to be, even in person.  

Still, a number of companies continue to prefer carrots (incentives such as time off, cash bonuses, and prizes) over sticks (mandates). Some companies and agencies have explored a middle ground, placing an emphasis on frequent testing and mask mandates for those who do not get a vaccine, maintaining a level of protection while perhaps hoping that employees will find these alternatives inconvenient enough that they will get the vaccine instead.

This is something that will play out throughout the economy and Freedonia analysts will continue monitoring the effects.

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