The Coronavirus has taken the world by storm. There is not a single segment, profession, or level of the society that has not been affected by it. Like everywhere else in the world, the US labor market has also been hit badly.
The US job cuts, that first revolved around blue-collar workers, are now taking over the white-collar workers as well. Businesses like hotels and restaurants, and industries like the international travel and airline industries, are on the front line of the crises.
It is estimated that over six million people are on the verge of this new wave of jobs cut due to the Coronavirus. The domino effect will continue and soon the Covid-19 will have taken over the real estate, finance, and even the service sector jobs.
Some people have been of the view that as lockdown comes to an end and businesses reopen, the US job cuts scenario might get contained and things might get better. However, we must not forget that the Coronavirus has taken over entire industries and have caused several major bankruptcy events in a very short period of time. Thus, according to experts, even after we try to get back to normal life, there would be a new “normal”. This new normal would not necessarily mean everybody gets their jobs back.
The US unemployment rate has climbed to 19.5%, which is a peak that the US has not experienced at any point in time other than the Great Depression. The continuous falling of payrolls, be it farm payrolls or private payrolls with declines of twenty-one million and 3 million respectively, only shows how bad the situation might get in the future.
We can also see a trend of white-collar workers shifting to other jobs. Even though this might not be of a lot of help, this is one panic trend that has come about as a result of the novel Coronavirus. Having said that, the situation of US job cuts can also be judged by the fact that there are over forty million applications with several state-regulated programs, these applications are from people who are jobless and need benefits as per their unemployment.
This could also result in most people not receiving joblessness benefits from the state, which could, in turn, cause civil unrest. People would be forced to come out on the streets as we move towards an even desperate time caused by the Covid-19.
Recent graduates who were newly hired are now forced to move in with their parents. These are the people who are young and wish to pay off their student loans by working multiple jobs after they graduate. Despite the urge of wanting to do hard work to pay off their debts, these fresh graduates are left with no option but to cut down on expenses and wait till things get better so that they are able to secure a job.
We might also be seeing new employment trends. The new normal has brought about the realization that companies may not need as many people to work for them as they needed before. This newly dawned fact has caused panic in most knowledgeable workers, who would now have to compete even more for the most ordinary of jobs.
Where most do not currently have jobs, others who luckily found jobs have settled for lower-paying work and are struggling to keep up with their previous lifestyles. Another segment that is hit hard by the pandemic is the workers who work on a per-contract basis. These people have lost not only the ongoing contracts but almost all future contracts and income.
No matter how much the state helps the jobless segment of the society, it would not be able to cater to the jobless white-collar workers. No relief would be enough to normalize this loss to the economy, as the benefits would not be able to cover all the working class. Thus, we all know that the relief injections that the state gives to the economy to boost it, are only temporary.
With people going jobless, it is no wonder that the disposable income of the middle-class Americans will also plummet. This would put greater stress on the economy as a whole. Not only growth will be halted, but the GDP will also fall further. The decline in consumer spending would also mean that small businesses would not be able to take this blow any further, and will shut down sooner or later.
However, having said all that, the one benefit to the white-collar workers is their relative financial stability. This segment of the American society is comparatively a tad more stable than the other, as it can at least sustain itself to a point that gives the government and even businesses time to sort this crisis out.
As a nation, we all can only hope and pray that the world heals from the Covid-19 crises soon, and no more loss of work comes about as we go along this pandemic.