A Blog by Jonathan Low

 

Aug 27, 2021

The Reason Businesses Are Starting To Lead On Vaccine Mandates

Never underestimate the compelling power of economic self-interest. JL 

Barry Ritholtz reports in The Big Picture:

As of August 7, the share of job postings per million that require vaccinations was up 90% compared to a month earlier. Why? Because expectations of returning to the office post Labor Day keep getting pushed back by the Delta variant. Corporate America has stepped in to fill the void. Companies have figured out it is in their own self-interest to get as many people vaccinated, and as soon as possible. The alternative is a return to a 2020-like lockdown that will work to the detriment of the vast majority of firms, becoming a drag on the ongoing economic recovery.

A few weeks ago, I lamented a lack of leadership among CEOs in the corporate sector on getting the country past the Delta variant of Covid.

I spoke too soon.

Craven political opportunism and naked ambition have kept governors in states like Florida, Texas, and South Dakota from doing their duty to protect the public from a dangerous viral disease; much of the gulf coast is on Covid fire, with half of the nationwide Covid hospitalizations in just 8 states.

While the Desantis and Abbots and Noems have been dithering — or worse, doing actual damage — Corporate America has stepped in to fill the void. Companies have figured out it is in their own self-interest to get as many people vaccinated, and as soon as possible. The alternative is a return to a 2020-like lockdown that will work to the detriment of the vast majority of firms, becoming a drag on the ongoing economic recovery.

 

Get Shots or Get Out, U.S. Employers Are Telling Workers

Source:  Bloomberg

 

For a variety of reasons, many (most?) companies want to see their employees physically back in the office. Both good and bad motivations exist: The good is building a corporate culture, creating a collaborative work environment, and generating a sense of camaraderie. The bad is a matter of control, or justifying lots of middle management shown by the WFH era as a mostly unnecessary cost; even rationalizing the sunk costs of a long-term office lease.

But recent corporate directives have made it clear that this is about more than simply edicts to return to the office; rather, there are some very positive steps being taken by companies to get everyone — their employees, vendors, and customers — fully vaxxed.

Let’s begin with a surprising company: Live Nation Entertainment. CEO Michael Rapino just announced that “Vaccines are going to be your ticket back to shows.” To perform at or attend any show, the nation’s largest ticket seller will now require vaccines. They missed scoring a perfect 10, as they will also allow proof of a negative Covid test as well — a far less safe alternative. Still, it is a big win for people who attend live events.

Some companies are trying to place the financial risks of being unvaccinated on those who choose to go that route. Delta Air Lines is requiring employees to be vaccinated against the coronavirus. If not, they must pick up the costs of the additional risks they create by paying a $200 monthly surcharge for their health insurance. Unvaccinated Delta employees who were hospitalized cost the company an average of $40,000 each in additional (and if vaxxed, avoidable) medical costs. The decision not to get vaccinated has costs, and it is not fair to throw that expense to third parties, e.g., everyone else. Good on Delta for this one.

The National Football League has figured out how to beat vaccine hesitancy. The league makes billions of dollars from their live games and television rights. The league put its foot down hard on any resistance to getting vaccinated against COVID-19. Any team that wants to cancel a game due to a spike among unvaccinated players is marked as a forfeit. They lose, the opposing team wins, and the loss counts against playoff seeding. I’d count that policy as a score.

But it goes far beyond this: As of August 7, the share of job postings per million that require vaccinations was up 90% compared to a month earlier. Why? Because expectations of returning to the office post Labor Day keep getting pushed back by the Delta variant. September 15 has become October 15, November 1, or even 2022.

Wall Street, has a “take no prisoners” attitude towards getting vaxxed: The Street of dreams pays a giant financial premium for the ability to understand data, rationally analyze evidence, and exercise good judgment. “If you’re someone who is not vaccinated on Wall Street, you’re considered a loser,” one Wall Streeter told The NY Post. Good luck with your new career managing Q-Anon’s 401k.

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There is precedent for this: When governments stop governing and state Governors go AWOL, companies act in their stead. Nature abhors a vacuum, even when it comes to pushing workers to get vaxxed. It is overdue.

Slate’s round-up of organizations that issued mandates post-FDA approval is worth checking out, including Walt Disney World, CVS, United Airlines, CoxHealth, Chevron, and Hess as well as a number cities and universities.