This is an article “Looking Ahead When The Jobs Return” by Marc Primo
We’re already halfway into 2020 and so far, the year has brought us more bad than good. With the COVID-19 pandemic still not contained, shuttering businesses, spiking unemployment, and worst, claiming lives, a looming economic challenge becomes more apparent each month, with many asking if things can still go back to the way they were or if we should start embracing the new normal.
In the U.S., more people are losing their jobs—from hotel employees to cooks to retail cashiers. The hospitality and tourism industries have taken a huge blow from the current crisis that has also impacted retail, construction, sports, and even education. Since March, one out of four employees or over 40 million individuals in the U.S. alone have already filed for unemployment.
Bigger economic impact than the Spanish flu
While the country has a history of resiliency when it comes to economic recessions, the new coronavirus has caught everyone off-guard that despite its lower mortality rates than the Spanish flu, the economy seems to suffer harder today than in the past. Even with the many digital tools such as video conferencing, email, and e-commerce already widely being used for work, businesses and small and medium entrepreneurs are still feeling the brunt of the pandemic.
One of the main reasons for this is that most people are more fearful of contracting the virus today than back in 1918 when most workers would only quarantine themselves for a few weeks, and then return to work regardless of the risk. That explains the mortality-unemployment ratio.
Similar fears were shared in Australia and New Zealand, but the risks there were kept low and sank quickly, allowing the two countries to keep their economy and unemployment numbers in check. Economists noted that the longer we cradle our fears of the new coronavirus, the slower we will rebound from the economic crisis. But is it already safe to go out and work?
So just when will the jobs exactly return?
According to most experts, we may experience the economic downturn until 2022 with slight instances of slow recoveries in between quarters. However, a grimmer outlook can take place if the government doesn’t implement necessary and effective interventions or aid recovery as that could lengthen the economic crisis up to a decade from now.
How soon employment rates get back on track depends on the containment of the new coronavirus and the relaxing of shelter-in-place orders by each state. Rampant protests and electoral campaigns won't help either with more people not practicing social distancing measures that could result in staggering increases of new COVID-19 cases all over the country.
Lessons from the past
Somehow, there is still a huge risk in reopening brick and mortar stores, restaurants, barber shops and other establishments where a contagion can easily occur. Threats of second and third waves could also exacerbate unemployment and mortality rates even further. Without government action, more stores are doomed to close down and more people will lose their jobs in the event of a second lockdown. But there is still hope.
Perhaps, the economy’s slow recovery might finally materialize if we just revisit some lessons from the past. The Great Depression bailout (wherein the government used federal money to give aid to ailing businesses) seems like one feasible solution for today’s business quagmire. Another one is how large-scale infrastructure projects from both the government and private entities could streamline economic recovery within a year and open up employment opportunities for many. Either way, some rebuilding is in order and our resiliency depends on how we have learned from our past mistakes and taken more measures to curb the continuing rise of COVID-19 cases.
The old normal
The first signs of employment revival will probably be evident in the reopening of hospitality industries like hotels, restaurants, and tourism establishments. However, while social distancing measures are still in place, restaurants will only be capable of operating on a 5% average margin making it difficult to hit target revenues.
Until there is no approved vaccine for COVID-19, businesses will have to resort to limited operations and most people will have to look for other options to earn money and observe the necessary guidelines to flatten the curve. Only when we become successful in doing so can we rebuild at a much faster pace and look forward to more returning jobs and life as we once knew it.