In the UK, missing workers and those leaving quietly cost the economy an estimated $400 billion.

Since the pandemic, a growing number of working-age adults in the UK, aged 16 to 64, have chosen not to work.

Among those who have kept their jobs, many have joined the legion of “quiet leavers” who return to work but only do the bare minimum.

Both groups contribute to the UK's severe productivity crisis, worsened since the global financial crisis of 2008-2009. In comparison, the UK's productivity is 16% lower than the US and Germany, and continues to underperform most large OECD countries.

Who are the “missing workers”?

When the pandemic began in 2020, the UK workforce experienced a sea change. The country has lost thousands of workers – who might otherwise be looking for work – to long-term health problems, early retirement, mental health problems and an ever-growing NHS waiting list.

Four years later, with COVID-19 in the rearview mirror, that number has not rebounded. Instead, it reached staggering levels between February and April, with about 2.8 million, or 22.3 percent, of workers in the country considered economically inactive, according to Office of National Statistics data released Tuesday. This is a record number of people unemployed and not looking for work for nine years.

It is alarming to note that the crisis is fueled by young people entering the job market, generally Generation Z.

For the economy, fewer active workers means a limited labor supply, just as the UK tries to shake off a sluggish growth streak and grapples with an aging economy.

It could also cause inflation, which has recently shown signs of slowing, as companies try to retain workers by raising wages.

Both the Labor and Conservative political parties have pledged to get people back into the job market, given that this represents a £39 billion ($50 billion) drag on the economy.

How do discreet quitters find their way there?

The rise of remote work has sparked a trend of quiet abandonment in the workplace, in which employees stop going above and beyond for their jobs. Workers lack motivation and are not as “actively engaged” as they might otherwise be.

It turns out that the number of quiet dropouts exploded to the point where they cost the British economy £257 billion ($327 billion) last year, according to a Gallup report released Wednesday.

The scale of the problem is also reflected in the fact that only one in ten workers in the UK are classified as “engaged” at work. This is a sharp reversal from when the country led in the early 2010s with its highly engaged workforce.

Employees are struggling with poor management and unclear goals, compounded by broader trends like Brexit and macroeconomic volatility, according to the Gallup report.

The impact on productivity

Economic inactivity due to missing workers hurts UK GDP, while silent departures weigh on UK economic output per hour.

Productivity is a sensitive subject in the UK and there are no simple answers. This rate has been falling for over a decade now, while it is increasing in other countries such as France and Germany, widening the gap between Britain and its peers.

No one wants an economy that is not pulling its weight when it comes to productivity, because it undermines economic resilience in the face of major shocks.

A mix of underinvestment, unpaid overtime and other policy failings are among the factors making Britain underproductive.

An important factor to consider in the productivity debate is gross value added, which measures the value of goods and services produced in any industry or sector of the economy, said Ben Caswell, senior economist at the National Institute of Economic and Social Research.

“Fewer workers on the job will naturally mean less production,” he said. Fortune. “The ONS data breakdown suggests that by the end of 2023, 71% of the growth in total inactivity since the pandemic can be attributed to poor health. So that's definitely a concern for growth.

Given the productivity crisis looming large in the UK, a growing crowd of people quietly dropping out means another group in the economy who could be contributing more to work but are simply not doing so. In the case of the missing workers, it was health issues, while with quiet resignations, workers give up. So, if employees spend fewer hours working, it decreases overall productivity.

“If the 'silent shutdown' scenario holds, recorded hours worked remain constant, but workers perform fewer tasks during these recorded hours. So gross value added decreases but hours worked remain unchanged,” Caswell said.

To be sure, the UK has seen some victories on labor-related measures, such as low unemployment and strong wage growth. London is also the largest magnet for international talent in the world.

Yet productivity has become one of the country's biggest economic hurdles, and the new government faces pressure to address it.

“The next UK government must make tackling low productivity growth its top political and economic priority. This means giving it priority in decisions about public spending, tax policy, regulation and international economic policy,” said Creon Butler, director of the global economics and finance program at Chatham House, in a report from may.