Layoffs Start Turning From Temporary to Permanent Across America

figmentofmyass

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Quote from: btc_angela on May 14, 2020, 09:03:57 AM

I think one sector that has been hardest hit by the pandemic is the informal workers so the bulk of US unemployment come from that sector.

it's definitely not "the bulk" of the labor market, but you're right, it's a huge sector. according to these sources, it represents 20% of the labor market and >10% of the country's GDP.
https://www.stlouisfed.org/on-the-economy/2017/april/informal-labor-market
https://www.mprnews.org/story/2013/04/29/daily-circuit-shadow-economy

that means the real situation is much worse than the official unemployment numbers show, since informal workers aren't usually captured by those stats.

a better metric may be the "U-6" stat, which adds all persons marginally attached to the labor force and those employed part time for economic reasons. in april that was 22.8%, which is basically great depression level unemployment.

Ozero

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Quote from: EdvinZ on May 11, 2020, 04:53:48 AM

I think that with the lifting of the quarantine, the economic situation will gradually improve. Many businesses were not prepared for the epidemic and now their owners should review the mechanics of their businesses. For people laid off because of the epidemic, the American government at least pays monetary compensation, unlike some other countries. Perhaps this is a good chance for some citizens to learn professions for remote work or freelancing.

It is impossible to prepare for such a pandemic in advance. Of course, coronavirus has already caused significant damage to the economies of almost all countries and its consequences cannot be completely eliminated. Many commercial structures will not be able to fully recover. However, there is something good in everything bad. Coronavirus will restructure the work of all markets. Those who are better equipped to work in the new conditions will remain. Coronavirus will also accelerate the transition to digital money and, in general, to digital technology.

btc_angela

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Quote from: alani123 on May 11, 2020, 07:41:31 AM

However, I still see one really big issue. Monetarily, the EU proves to be very dysfunctional... Long story short, but the biggest loser states from coronavirus are left on their own devices for their financial recovery. A little contradictory to having a monetary union.

EU though are very dysfunctional ever before the advent of the pandemic.

I think one sector that has been hardest hit by the pandemic is the informal workers so the bulk of US unemployment come from that sector. So projections for the 2nd quarter is going to be worst, around 14%-17% unemployed and that is a huge numbers. They can offer subsidies, but that will go and stretch for months alone. That those people need are real jobs, and the US economy's recovery are going to be painful and long.

avikz

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Quote from: whyrqa on May 10, 2020, 06:00:08 AM

to one way or another, the US economy will suffer very much from the fact that massive layoffs of people from work. Recently, even large companies such as Boeing have been announcing a massive reduction in the number of their employees. all these people will in any case apply for unemployment benefits. I believe that the US government is faced with a very large problem that will exceed the performance of the well-known Great Recession. there are no real plans to overcome unemployment and enable people to have real livelihoods.

It's not just US, but majority of the other countries as well. We are seeing the same trend even in Europe. My company has fired a lot of people from both US and EU and especially those who are sitting at the top of the chain and the monthly salary is on the higher side. So the entire world is dealing with this problem and not US alone. However, I doubt this situation will be permanent. Because once the market opens up, people will gradually find the employment because businesses will need more people to function. But definitely, the situation will not be same as before overnight, but slowly and gradually things will come back to track.

Majority of the countries are announcing financial packages and loans to the small and medium sized businesses so that they can ramp up their operations as quickly as possible. The world leaders are not donkeys so have a little faith.

Lorence.xD

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The reason that this lay-offs are getting permanent is that the infection chain is getting longer and the people are not following the measures to prevent the further spread of the virus, I am not saying that all of this is the fault of the people, they are the most affected in this pandemic, so they should atleast do their part when it comes to this problem. In my opinion the government should focus on keeping the chances of infections low and welfare of their people, this things should go hand in hand because flattening the curve while making the masses satisfied with the government's help is an achievement.

FanatMonet

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You see, a huge number of countries faced a very difficult choice, either to return to work in order not to destroy the economy, or to extend the quarantine further, but with catastrophic consequences in the economy. I would say that quarantine should be left only for the elderly and people with serious illnesses.

gantez

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I believe the American government to bounce back to normal after this problem and the economy will start up again, people layer off will regain their places of livelihood. The government is likely to open up other means of helping played citizens to survive until something tangible is restored.

sana54210

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That is the sad thing about whats about to happen as well. There will be inflation because there will be money printed but people will use that right away towards companies who will sell them stuff that they need, so people will survive while companies make a profit, while companies get free money too.

So, you get companies earning double at that time whereas people are earning nothing at all. And that means people will start to accept any job they are offered, and the minimum salary is denied to go up as well, it should have a revision right now because we have seen that minimum salary people are the people we needed during this crisis, the hardest workers have been them. So, right now we are going to see people working for less instead, whereas companies get even bigger, so the smaller salaries we get will pay for even less.

alani123

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The amount of unemployment applications is just record breaking and perhaps very telling of whats about to come. The seriousness of the situation, combined with the lack of action from the federal government in the U.S., has lead to increased trust in state/public organizations here in Europe. In spite of a turn to the right in recent years, coronavirus has made it so more people seek state involvement now, appreciating public health and such social measures. And it makes sense to come to this conclusion. Central planning works well for disaster relief and crisis management. The European common tactic of increased state involvement and regulation appears to have held back the worst compared to the U.S..

However, I still see one really big issue. Monetarily, the EU proves to be very dysfunctional... Long story short, but the biggest loser states from coronavirus are left on their own devices for their financial recovery. A little contradictory to having a monetary union.

wxxyrqa

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UN analysts have made disappointing conclusions because, according to their statements, almost 25 million people lose their jobs due to the economic crisis created by the coronavirus pandemic. In addition, due to big problems in business of any direction, people will lose their salaries, which according to research can range from 1 billion to 3.5 billion dollars in unearned salaries. Even assuming what kind of labor market will exist, it will practically turn any person into a slave, since there will be much fewer jobs, and there will be a lot of people at the workplace, and the employer will use this in order to significantly reduce wages fee. this way people will work for nothing.

Kakmakr

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Politicians are politicians and they will always paint a rosy picture of the most grim situations to gain favor from the voters. So take whatever they are saying with a pinch of Salt and just use your own logic and observation skills to see what is the truth.

There are currently a global pandemic and a global economic slump, so for them to say everything will magically recover in a few weeks is pure bull$hit. The impact of this pandemic and the quarantine and lock down ramifications will have a long lasting impact on the economy of every country.

I even expect a huge dip in the Bitcoin price, because people will not have the money to invest in high risk investments. Angry

MCobian

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In my opinion it is not only in America that permanent layoffs occur. Almost every country affected by the corona virus experiences the same thing.
This is a world disaster, we are in a time of greater economic crisis than the 2008 economic crisis. Many of the world's population is starving,
therefore this is the time for those who have financial advantages to help people who are financially difficult. Because if only expect help
from the government alone, it will be difficult to solve this problem. It takes cooperation from all parties, I hope the vaccine can be found soon.
So the corona virus can be stopped, then the economy can bounce back again.

exstasie

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Quote from: EdvinZ on May 11, 2020, 04:53:48 AM

I think that with the lifting of the quarantine, the economic situation will gradually improve. Many businesses were not prepared for the epidemic and now their owners should review the mechanics of their businesses. For people laid off because of the epidemic, the American government at least pays monetary compensation, unlike some other countries.

And if they keep printing money to extend unemployment, maybe that band-aid will keep things chugging along. But they probably won't do that forever (the extensions are set to expire in the summer) and the outlook for unemployment is getting pessimistic. Supposedly, 42% of recent layoffs will result in permanent job losses: https://bfi.uchicago.edu/working-paper/covid-19-is-also-a-reallocation-shock/

Government projections don't look much better. The CBO doesn't expect sub-10% unemployment again until the end of 2021: https://www.cbo.gov/publication/56335

It's shaping up to be a rough couple years ahead, all considered.

EdvinZ

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I think that with the lifting of the quarantine, the economic situation will gradually improve. Many businesses were not prepared for the epidemic and now their owners should review the mechanics of their businesses. For people laid off because of the epidemic, the American government at least pays monetary compensation, unlike some other countries. Perhaps this is a good chance for some citizens to learn professions for remote work or freelancing.

freedomgo

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As expected, it would affect the economy since US has a good economy but they are hit hard by the virus.

Trump sometimes is a kind of person who are good in giving assurance but smart people would understand that it's just the way of the government to keep people relax, but in reality, their economy is already struggling, ... this is the time where the government has to make a crucial decision, economy or the health of the people, if they choose the health of the people, they will have to support the people as people can't work and they can only do that if they have a lot of money to support the people, so what are they gonna do, are they going to print money again?

exstasie

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Quote from: gentlemand on May 10, 2020, 06:10:37 AM

Quote from: whyrqa on May 10, 2020, 06:00:08 AM

I believe that the US government is faced with a very large problem that will exceed the performance of the well-known Great Recession.

The UK is heading towards a similar outcome. We're going to have some of the highest death rates, the highest economic damage and be the least welcome in other countries.

The headlines are just staggering: BoE warns UK set to enter worst recession for 300 years

The worst since "the great frost" in 1709. I can't even fathom what the hell that means. Lips sealed

Like the Fed, they've also just committed to unlimited QE: https://www.bloomberg.com/news/articles/2020-05-07/boe-s-bailey-signals-stimulus-ahead-as-officials-urge-more-qe

What an incredible time to live in.

plvbob0070

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It results in this scenario because the government did not take immediate action for this virus to prevent it from wide-spreading across the whole country. They thought it was just a simple virus, and now the situation worsens.

Probably companies are doing this to save their business. They can't operate so they have no revenue, and maybe that's the reason why they are doing it, to avoid giving too many benefits for their workers. Maybe they don't want to take some responsibility to pay their employees that is why they are reducing their workers. But I believe that after this pandemic, businesses will operate again and they will also need more workers. When businesses become stable and were able to earn a profit, I think they will hire some workers again. It may be a permanent layoff for some companies, but workers can still get a job at another company after this pandemic.

gentlemand

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Quote from: whyrqa on May 10, 2020, 06:00:08 AM

I believe that the US government is faced with a very large problem that will exceed the performance of the well-known Great Recession.

The UK is heading towards a similar outcome. We're going to have some of the highest death rates, the highest economic damage and be the least welcome in other countries.

This is the inevitable outcome of refusing to acknowledge the cat is out of the bag until it actually returns and sinks its fangs into your balls. By then it's far too late of course.

However we'll have to wait until it's cured or becomes a fact of life to know who had the best strategy. The places that went in early and went in hard might be looking like champs now but they might also have done nothing beyond offsetting the pain to a point further down the road.

Glad I ain't running any countries.

whyrqa

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to one way or another, the US economy will suffer very much from the fact that massive layoffs of people from work. Recently, even large companies such as Boeing have been announcing a massive reduction in the number of their employees. all these people will in any case apply for unemployment benefits. I believe that the US government is faced with a very large problem that will exceed the performance of the well-known Great Recession. there are no real plans to overcome unemployment and enable people to have real livelihoods.

exstasie

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Quote from: DoublerHunter on May 08, 2020, 12:10:01 PM

^ Well I am not live in America but let me share my opinion, if temporary layoffs will turn into permanent then it will be a disaster to the whole country. I rather have to work with a smaller income than none at all it will not be the resolution for businesses it may only cause the bigger problem to the government for people who will die of starvation.

There's actually a very curious phenomenon happening.

The big stimulus bill passed in March gifted $600/week in unemployment benefits to those laid off because of the pandemic, on top of their normal state unemployment benefits. So now there is a situation where a lot of people are making more money being unemployed than they do at their normal jobs. And now that businesses are reopening, those workers are refusing to come back to work. https://www.foxbusiness.com/money/coronavirus-businesses-struggle-lure-workers-away-unemployment-benefits

Quote from: gentlemand on May 08, 2020, 02:29:45 PM

I don't think there's any way of knowing what economies will look like at this stage. It might surprise us all with a rebound or it might be the beginning of the rout of the millennium.

Yep, the stimulus sure has infused lots of cash into the markets. It has also created lots of perverse incentives that will hurt any recovery, and a whole lot of confusion in the markets.

I have no idea how it will all play out. My original model was the 1987 stock market crash, but that seems way too optimistic now. At the same time, it's hard to bet against something like $10 trillion printed by the Fed and Treasury.

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