A whopping over 40 million American workers lost their jobs and sought unemployment help during the coronavirus pandemic. Although first-time jobless claims fell to 1.2 million last week (ending August 1) continuing a downward tren, 17 million workers are still unemployed.
As we look ahead to the fall, we are hopeful that infection and mortality rates will fall enough for new lockdowns and limitations to be lifted. Even more promising is the development of a COVID-19 vaccine. It would effectively end the health crisis and help get life back to normal–whatever that becomes.
But a question we should ask is whether the millions of workers who lost their jobs will ever get them back?
Economists are starting to believe that some jobs simply may never return.
It is difficult to estimate just how many jobs will be gone for good. However, in new research economists at the University of Chicago project that anywhere from 32-42 percent of COVID-induced layoffs will be permanent based on surveys and unemployment claims.
Decreased consumer spending is driving much of the expected job losses. The prospect that some jobs may never return is grim, but several positive employment trends are cushioning the blow to unemployed workers and give us hope that our workforce will be stronger in the long run.
Failed businesses
Many workers were temporarily unemployed when their employers were forced to shut down, but not all firms have survived despite shutdown orders being lifted. About half (47 percent) of private-sector workers are employed by small businesses, so mass business failures will, unfortunately, lead to continuous waves of laid-off workers.
In a survey conducted in July by the National Federation of Independent Businesses, nearly a quarter (23 percent) of small business owners indicated that their businesses will fail if economic conditions do not improve within the next six months. Another 22 percent said they can keep their doors open for up to 7 to 12 months unless the economy improves. According to National Restaurant Association surveys in the spring, 3 percent of restaurants already failed.
The reopening of small businesses like restaurants and nails salons has allowed perhaps millions of workers to return to their jobs. As consumer demand rises again, we can look forward to other firms coming back online. Nonetheless, it will take time for them to ramp back up to their pre-COVID operations and staffing levels.
Workers shift to in-demand jobs
The spike in online shopping, food delivery, and virtual education has driven hiring booms at companies such as Walmart, Target, Instacart, and Domino’s. Purchasing groceries and essentials has also triggered hiring sprees to meet the demand for budget-friendly stores, grocery stores, and home repairs stores. Our increased reliance on technology has also driven technology companies to beef up their staff. The hospitality industry has been hammered, but workers have found new work through partnerships between hotels and grocers and pharmacies.
As smaller retailers fold, their workers may find employment from these employers, somewhat blunting the impact of business failures. Private companies have demonstrated how quickly and efficiently they can reallocate labor (without government direction).
Working from home takes center stage
Forcing workplaces to close indefinitely has revealed to employers that many of their operations can be done remotely with little or no disruption. Economists estimate that as a result, one-fifth for office workers will be able to work from home even in the post-pandemic world. That’s a win for workplace flexibility and could lead to a migration of workers from pricier urban areas to suburban, rural or wooded areas (granted they have reliable and fast internet access).
The pandemic is undoubtedly changing the way we work and the work we do. For many, it will be for the better.