A New Wave of Coronavirus Means A New Round of Layoffs

Image via CSISMag

The U.S. economy has lost at least 15% of jobs or more in every sector/industry. While many jobs are slowly picking back up, no industry has fully recovered yet. Most white-collar jobs (jobs that are professional, performed in an office or administrative setting) have transitioned to working from home, however blue-collar jobs (jobs that require manual labor; skilled or unskilled) have remained to be essential, so therefore they need to be on site. You can read more about the difference of white-collar jobs vs. blue-collar jobs here.

According to the Bureau of Labor Statistics, below shows the percentage of jobs in each industry that were cut and the percentage of job cuts that recovered as of November 2020.

Industry% of jobs in the industry that were cut% of job cuts that has recovered
Accommodation43.6220.46
Administrative and Waste Services17.4941.01
Air Transportation15.28-36.88
Amusement, Gambling & Recreation58.0651.05
Arts, Entertainment & Recreation53.7740.13
Clothing & Accessories Stores61.8359.24
Dentist Offices56.293.24
Department Stores24.8293.31
Film & Sound Recording Industries51.718.61
Financial Activities3.1541.94
Food & Drinking Places49.3961.85
Furniture & Home Furnishing Stores46.1273.65
Government4.262.79
Healthcare9.5657.68
Hospitals2.31-3.62
Leisure & Hospitality49.3253.84
Manufacturing10.6152.53
Museums & Historical Sites28.487.21
Professional & Technical Services5.7842.85
Retail Trade15.2179.74
Scenic & Sightseeing Transportation65.9438.02
Social Assistance16.2945.81
Source: Bureau of Labor Statistics, November 2020

With more job cuts and layoffs, there will be less job postings and this will impact the way that employers reassess and reevaluate their plans as they move forward. With the new wave of Coronavirus hitting this winter, many sectors and industries will be facing job deficits due to low demand.

The rate of the quitting is not unusually low despite the high unemployment rate and the pandemic. The impact of this downturn is inconsistent because some folks have no job prospects, while other folks are constantly finding opportunities. According to CSISMag, a staggering 20.7 million jobs were lost in April, marking the steepest drop in employment on record. Employers have since restored over 9 million of these jobs, but the ongoing pandemic may undercut this partial rebound.

There are some folks who have received one or multiple offers and voluntarily changed jobs during the lock down, while there are other folks who are very skilled and has talent, as well remaining diligent throughout their job search — can’t even get a slice of that opportunity; particularly those who are recent graduates, those with disabilities, illnesses, ageism or other personal reasons like taking care of children or a family member. It has become extremely difficult for folks who have extensive experience and are heads of households who need living wages. So, the longer that they remain unemployed, the harder they will be seen as employable, due to the harsh reality that they are letting those skills atrophy.

Because of the job deficits that these companies are facing, some promote internally or bring on a new external hire due to the fears of budgets up in the air. There are also a handful that are simply willing to hire entry-level workers at low wages to hedge their stakes against a declining economy.

Aside from employee layoffs, there are also many individuals leaving their jobs due to big cuts in their hours — affecting their pay. They want to find a job that is equal or slightly close to what they were making before the pandemic, however it is not easy. This leaves the labor market with more job seekers than job openings. In order for one to keep their unemployment insurance, they have to constantly apply to many jobs per week — which makes it very strenuous for individuals needing a job to finding one quickly or even at all.

How To Reduce Your Chances of Being Laid Off

Some have inquired about how they can avoid or protect themselves from being laid off in the future, or seeking a career that would be recession-proof. This can be a scary thing especially for folks who are employed with a company that offers no stability, no perks and no advancement opportunities.. and even companies who are at risk of laying off their employees right now due to the global recession. During a time of uncertainty, this is very tough because nobody is immune to this.

Image via GeeksforGeeks
Check out their article. They have excellent tips on how to manage layoffs as well!

In this case, half of the world is unemployed due to unwanted situations of COVID-19: temporary furloughs which in many cases, leads to permanent furloughs and massive layoffs over the span of 2-3 months since the pandemic.

So, for those of you who are currently employed, take a moment to appreciate the job/career that you have. Appreciate your contributions. Appreciate your colleagues. Be thankful for what you have and what you receive. Many of us do not take the time to think about this, however the job that you are currently employed at, gives back to you in many ways. Of course, income is one of them. But think about the things you are receiving at the moment: paid time off, health insurance, blended benefits, experiential rewards. The list goes on.. There is always something to be thankful for.

Sometimes, layoffs are hard to avoid (due to organizational restructuring, business downsizing, a pandemic, etc), however the list of advice below are ways you can prevent or protect yourself to lower the odds.

  • You should hone or learn a new, unique skill that will set you apart from others in the applicant pool. Put a plan in place to gain those new skills. List the skills that you want to learn.
  • Make an effort to educate yourself on all aspects of your employer. During these strenuous economic times, it is likely possible that you may be asked to take on additional tasks of other employees – which can be something that you may be under qualified / overqualified for, let alone something that you do not feel comfortable in taking on.
    • Show that positive demeanor, no matter how hard it can get – because in the long run, this behavior will yield good results. Employers will most likely remember those who assisted them through these arduous times.
    • When you are knowledgeable of all aspects of your employer, this shows that you are more exposed to different projects and learning about what other teams are doing. If you make the effort to engage in team meetings, inquiring to collaborate and assist colleagues with project deadlines that they are struggling to meet, this will convince the employer that you are a valuable asset to them – leading them to reconsider their decision in letting you go. You already have built a strong bond with the employer and they will have a difficult time in letting you go.
      • Do not slack off just because you have received a positive performance review or an appraisal from your boss/supervisor.
      • Take an extra mile and do more than just the responsibilities that are being assigned to you. Deliver great results. Understand the contribution that you make. This is key to becoming a superstar in your workplace. Employers want irreplaceable employees.
      • Put your skills into use and take ownership. Acknowledge how you are viewed and reevaluate what your reputation is. Instead of focusing on day-to-day and short-term goals of the job, start thinking of long-term goals and how you can demonstrate your leadership to your employer.
        • How can I improve the financial health of the business?
        • How can I build a lasting legacy?
        • How can I increase more traffic?
        • What new strategies or tools can I implement to market my employer?
        • Any new products or services I can add to the employer’s existing offerings?
        • Are there ways I can increase productivity?
        • What are some of the best practices to increase market share online?
  • If you are a job seeker who is seeking employment during this suffering economy, make sure that you are researching on the fastest growing companies. If you are located in the New York City area, you may find this helpful: 100 Fastest Growing Companies in New York City in 2020. Don’t let the unemployment numbers fool you, as the labor market is more competitive now than it ever was before due to the high number of job seekers and less job openings.
  • Stay in touch with your network on LinkedIn and reconnect with your existing connections – such as your former bosses/supervisors/colleagues, employment advisors! Do so in a meaningful way where they can speak favorably and highly of you. With this, you will have more people to speak with, as well as keeping you in the loop of any potential opportunities that can reduce your chances of being laid off.
  • If the employer you are working for is at risk of laying off their workers or filing a bankruptcy chapter, you might want to put yourself in your boss’s shoes. Seek ways and methods to help your employer reduce costs, increase revenues, etc.

Workforce Confidence Levels Drop in the U.S.

Workforce confidence levels have been improving in many states by the end of June compared to the beginning of March; and to name a few: Ohio, New York, Illinois and Pennsylvania. Many small and medium sized businesses are slowly getting back up and bustling. For the most part, these states have been reopening cautiously.

However, due to the rapid reopening of some states such as Texas, California and Florida – their employment recovery has been shifting backwards recently. Their workforce confidence levels have dropped significantly due to the sudden spikes of COVID-19 cases in June.

Below, you will find a more specific chart illustrated by George Anders from his LinkedIn article to show the confidence levels across the U.S. that are heavily affected by this pandemic.

Table of 12 large states, showing their June COVID-19 cases as well as the workplace confidence levels of residents in those states

Image via George Anders’ article

Once the workforce confidence level has been exhausted, this can trigger setbacks in causing rollbacks of the reopening plans – delaying the economy and businesses as well as weakening our consumer spending.

While there are still huge spikes in confirmed cases, the unemployment rate in many states are still continuing to rise slowly if not rapidly.

Many Americans are still unemployed, however more are slowly becoming employed again as the unemployment rate has decreased from 14.7% on April 2020 to 11.1% on June 2020. Due to economic reasons, over 9 million are employed as part-time workers or working with significantly reduced hours.

According to the U.S. Private Sector Job Quality Index (JQI), over 37 million jobs in the U.S. are more susceptible to layoffs in the short-term. These jobs are the hardest hit by this economic and health crisis, which include the following that are in the service sector: those in retail, hospitality, food service, real estate, education, etc. It is stated that “most of these were front-line, customer-facing jobs that offer both low hourly wages and a limited number of hours of work per week.

These low-wage workers are hit in multiple fronts since many of them do not have health insurance from their employers, many of them are underrepresented and underpaid, some of them are in debt, and some do not have enough money in their savings to secure their living expenses. In addition, some of them are ineligible to claim unemployment insurance because there are also those who work off the books and do not pay taxes.

It is also becoming more transparent that many who were supposedly temporary layoffs, are becoming permanent layoffs. This means that there will be a longer extension period of unemployment benefits and we will soon – see a significant increase in new filing claims, surpassing 30 million unemployed Americans as of the week ending July 4th.

With the expansion of unemployment benefits, in addition to the new federal funding of the $600 Pandemic Unemployment Assistance during this recession – many find that it creates a disincentive for the unemployed to return to work, since it is argued that these individuals earn more from unemployment benefits than they did from employment.

However, these unemployment benefits are actually a good thing since it helps keep the economy running. With the coverage and payouts, this will permit individuals to continue paying their rent, groceries, utilities, Internet, other insurance and consuming goods while the economy is still playing its role. While some states are shifting back to their normality, not all of them are confident enough to financially support their citizens, residents as well as businesses. After all, the federal government has the power to generate resources and twist things around to inhibit this exacerbation.

While the $600 Pandemic Emergency Unemployment Compensation is running out and is set to expire on July 26, 2020, all 49 states except for South Dakota are offering an extra 20 weeks of regular extended unemployment insurance benefits until December 31, 2020. In addition, our second stimulus bill which was approved by the House of Representatives – offers an extension of $600 Pandemic Unemployment Benefits until 2021, however it has not been passed by the Senate yet.

Chart via U.S. Bureau of Labor Statistics (To see the number values for each state, refer to the source.)

Based on the chart above, this depicts where the 50 states are currently standing as of June 2020 over a 12-month period since June 2019. It is affirmed that “Massachusetts had the highest unemployment rate in June, 17.4 percent, followed by New Jersey, 16.6 percent, and New York, 15.7 percent.

Due to the prolonged joblessness, it is necessary that these unemployment benefits continue even if the economy picks up. Right now, supporting those low wage workers who are now jobless, will be obligatory in ensuring a resilient economy once there is a solution to this public health crisis.

Once everything normalizes, this will be the approach to economic recovery as we will continue to see that there are more available job seekers than job openings.