Mixed Strategy & Vaccine Mandates: Will Companies Lose Money?
From corporations to individuals, everyone wants to return to a pre-pandemic level of normalcy. COVID-19 vaccinations, supposedly, offer an avenue back to some semblance of what existed before. While companies are eagerly resuming in-person activities, “safety” from the pandemic is not quite in reach; vaccine rates have plateaued, cases are rising, and it’s becoming increasingly clear that some people will not opt in to this vaccine. Only 55% of American residents are fully vaccinated, and most unvaccinated people have lower incomes [Source: Axios]. Companies with higher-educated, wealthier labor forces have little problem enforcing vaccine mandates since their employees are more likely to get the vaccine regardless. But for companies like Amazon, whose working class labor force has lower rates of vaccination, the question of vaccine mandates becomes a lot more controversial, and a lot more economically difficult.
As President Biden’s new corporate vaccine mandate starts to take effect, the question increasingly becomes: will workers simply quit to find jobs that don’t require vaccination? An article published by the San Diego Union-Tribune called in several experts to debate the likelihood of labor shortages as a result of mandatory vaccine policies.
The idea of workers leaving their jobs thus becomes a question of game theory; given a company with high need for laborers, what will be there payoff if they require vaccines versus not requiring vaccines? Every company wants to maximize the number of people they have employed; if a company were to enforce vaccination, they could lose employees over this debate. If they don’t enforce a vaccine policy, they could lose employees who do not feel safe in that work environment. Especially given that no mandate is currently more common against lower-income workers, consider the following game example where the payoff is the number of employees at each company:
Clearly, if there is one industry standard, then laborers would be forced to conform. However when there is divergence in policies, companies who mandate vaccine may start to lose laborers, thus losing earning potential.
While this dilemma is hopefully solvable in light of Biden’s new vaccine policies, the inevitability of people subverting these new rules leaves room for volatility in the labor market.
Blog Post Source Article: sandiegouniontribune.com/business/economy/story/2021-09-17/will-a-lot-of-workers-quit-over-the-vaccine-mandate