The global labor market and economy are currently facing an extraordinary recession with the onslaught of the pandemic. We are going to explore the major changing trends in the job market as Covid-19 goes on.
1. Slowing of job gain
Once the flurry of summer hiring died down, the pace of job gains fell drastically. From February to April, around 22 million employees lost their job. However, between the months of May and August, fifty two percent of job positions were recovered. The data collected for the following September to October showed that the employment flow is slowing down. The rate of employment currently is still below 11 million by pre-pandemic standard. It also dropped to 7.9 % in September.
2. Qualified workers have become rare
During this period of recession, the labor industry has behaved vastly different. The trends have not been identical to other times when employment is at its lowest. Rather, finding eligible workers have become hard, quitting rates are high and finding a job is easier. There are several reasons behind this disconnection. Most people who are listed as unemployed are not seriously looking for a position.
Why though? Firstly, people expect to be called back to the jobs they were forced to leave. Another thing that is unique to the Covid-19 situation are convenient unemployment benefits. Because of the risks of catching the virus people are less eager to return to work. Lack of childcare also plays a prominent part in this decision. Although the figures of unemployed people is at an unprecedented high, employment seeking has become relatively less.
3. Labor force has become unpopular
There is a significant drop in the number of labor force, specifically when it comes to women. Childcare crisis is one of the main reasons behind that. Additionally, the participation of 65+ labor force has dopped in the pandemic. This has occurred after twenty years of constant increase. In this recession, preparedness for retirement was not harmed by drop in stock and home prices. The pandemic has not speeded up any delayed retirements. Furthermore, the risk of the virus infecting senior people has also led to retirements.
4. Services and goods have switched positions
Mostly during a recession, consumption of products lessens while services are not affected the same way. This time though, the opposite has happened. Most of the employment losses occurred in the service industries that were damaged by social distancing. Those include, lodging, travel, and entertainment, restaurants, childcare and elective healthcare except writing service industries.
While on the other end, spending upon products has skyrocketed. Especially in the leisure related department. In consequence, jobs have grown better than average in related industries. Namely transportation, production, storage, and goods selling. Retail can be considered and exception. As several industries are experiencing a huge drop in employment linked with a rapid shift in online purchasing.
5. K-shaped uprise in the labor metrics
Workers who are beginners, female, part of a minority or have less education are affected by employment loss. This is basically because they are concentrated more in industries that have been hit harder by the pandemic. In result, these individuals are facing a higher increase in rates of unemployment.
6. Wage division and salary cuts will continue
A great number of employers have begun to lower their budgets relating to salary increase. As it happens in recessions, newly hired people are likely to receive a larger drop in their wages. This is not as certain to happen when it comes to workers that are more experienced.
7. Remote work is the new norm
After almost 8 months, the perception of employers has also changed considerably. They have gained an understanding that remote work does not have negative effects on productivity. If anything, it actually improves work production. That results in a growing number of employers who are willing to shift work permanently to remote mode. They are ready to hire 100% virtual employees for their businesses. The permanence of remote jobs is up till now, the hugest economical legacy of the pandemic.
8. Deep recession in city centers
Due to Covid-19 less people are coming for jobs and spend their finances in central cities. The drop in hiring employees since the pandemic first hit was major in principal cities. Outside of big metro areas the activity in hiring is above pre-pandemic levels now. The recession in city centers is likely to continue for long term and effect the economy accordingly.
The pandemic has been an enormous game changer for major industries around the world. The coastal areas like Pacific and Northeast regions also shouldered employment losses on a major scale. The spread of the virus occurred in those areas earlier, hence the measures for social distancing were more restricting. Metro areas and holiday destinations were also affected greatly by it. Job losses were huge in lodging, travel and dining areas, especially in metros.
What is understood from these figures and facts is that economic growth and employment revivals will decelerate further. Covid-19 cases are still rising and fading government incentives limits the spending ability of numerous households. For the year up ahead, much depends on the resolving of the pandemic crisis. Optimistically, Covid-19 will be neutralized, leading to a recovery of the affected industries. The drop in the unemployment rates is also expected to improve. But the scenario is not something we can count on yet. Businesses need to prepare themselves to handle the worst in 2021 also.
Market trends are everchanging, but nothing has been as massively hard-hitting as Covid-19. Nothing could have prepared business owners or workers for how drastically things took a downfall. But it is time to look past that now and buckle up for a new culture and era. New policies need to be made and practiced, to bring a stability within the economy. This was our overview on the current condition of the pre-pandemic business industry. For more quality content on world economy or any other subject, contact our reliable essay writing service.