The United States seems to be on a path toward eradicating COVID-19, immunizing its population, and initiating plans for reopening the economy. The health threat still exists, but greater numbers of governments and leaders are turning their attention to what lasting effects the pandemic and the ensuing business shutdown will affect the country’s workforce. Metasys is confident the nation will rebound from the economic hardships the virus has and will continue to inflict. While today’s hardships have vastly different causes than previous ones, we may take some lessons from the downturn of 2008. Following that recession, wages remained stagnant for nearly three years and the impacts reached most industries and occupations. This time around the situation may not be as dire, as the country’s underlying economy was going strong before the disease reached these shores. But we also know there may be more painful times ahead; the economy will need time to recharge, and that will bring consequences to America’s workers. We have compiled our best estimation of the challenges and successes the U.S. economy can expect.
Some Industries Hit Hard . . .
Unlike the last recession, the current downturn seems poised to hit certain sectors and industries harder than others. Gross Domestic Product in the U.S., Asia, and Europe is virtually guaranteed to drop, but travel and hospitality will continue to suffer disproportionately negative consequences. Their recovery will come later than most other industries. Not only must there be a significant reduction in the number of COVID-19 cases, but consumers will have to regain lost confidence and become willing to spend again. Even if vacation destinations can reopen and the risk of sitting in close quarters in airplanes, restaurants, and sports arenas ebbs, people who lost jobs probably won’t be taking many vacations until they get back on their feet. There may be a glimmer of hope, however. Once the country emerges from the COVID-19 shadow, some economists expect a hiring surge. With a steady paycheck, Americans may be inclined to seek diversion and forget about their recent troubles. That could spell a boom for entertainment venues on the heels of the current bust. There is a precedent for this optimism: The Roaring ‘20s were borne to large extent from the nation’s relief over the dissipation of the Spanish flu of 1918-19.
. . . Others Avoid Trouble
Healthcare workers, on the other hand, will of course see an expansion of job opportunities throughout the pandemic and afterward. The need for patient care, production of personal protective equipment, and vaccine production, delivery, and further research will continue.
Employees in some other critical industries also will find ample job growth during and after the current crisis:
- Grocery and Department Stores – Demand for food is inelastic, no matter how tough things get. There will always be a need for cashiers, stockers, warehouse workers, delivery drivers, and others associated with the food industry. As we remain hunkered down in our homes, other retail outlets may prosper. Being cooped up at home has given many the opportunity to contemplate renovations and upgrades to electronic equipment, video games, and other pastimes that require equipment and gadget purchases.
- Transportation – The pandemic has wreaked havoc on the global supply chain and spotlighted what many consider an overreliance on raw materials and finished goods from Asia and Europe. Long-haul truckers, rail freight companies, and the workers who support them in transporting industrial inputs and finished products will find themselves in demand throughout the remainder of crisis and beyond as companies look to expand and leverage domestic sources.
- Construction – Most states that called for the shuttering of non-essential businesses excepted construction from the order. Building material from overseas will be more difficult to procure, and funding and private-sector developers will be scarce. But countries often try to build their way out of recession. In fact, already-approved federal spending by various departments includes money earmarked for infrastructure improvements and construction of medical research and treatment facilities, among other projects. Private projects put on hold because of the uncertainty surrounding the pandemic will come back online as more people obtain the vaccine and the weather warms.
Workers in these critical industries often toil in customer-facing occupations. Their employers increasingly are acknowledging that these workers did not sign up for the increased risk that comes with coming into contact with a possibly infected public. As a result, many rewarded their front-line employees with additional compensation in the form of temporarily higher hourly wages and bonuses. Whether they call it hazard pay, appreciation pay, or some other name, the extra compensation is an apt reward for the increased risks workers face while performing critical services. Hazard pay represents more than simple generosity on the part of employers. Higher pay keeps morale high and may decrease absenteeism and employee turnover, so companies save money on training and onboarding. Grocery checkout attendants, home improvement store clerks, and bank tellers are among the workers earning extra pay for coming to work during the outbreak. As the disease dissipates, these incentives may evaporate, making these jobs less lucrative. But with unemployment approaching 20 percent, workers may feel they cannot afford to give them up.
Hoping for the Best
Metasys is taking the optimistic view. We look forward to the U.S. economy starting to regain momentum. Recovery will be sporadic, with some regions of the country and some industry sectors awakening first. We also see demand for certain skills emerging from the doldrums more quickly than others. Workers with flexible, adaptable skills should be the first to return to work. Companies covet these workers for their ability to generate results in good times and in challenging times.
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