As businesses closed due to the nationwide lock down during April and March, many people were suddenly unemployed with most of that unemployment expected to be temporary. Yet half a year later, only 37 percent of employees have been called back to their previous employers while 33 percent of workers that were put on furlough in March were laid off for good. That means that 3.7 million U.S. citizens have been permanently unemployment as of July with expectations between 6.2 million and 8.7 million unemployed workers for later this year. The problem with permanent unemployment is that the more time people spend unemployment, "their labor market skills atrophy, their connections to the employers weaken and many start getting discouraged and ultimately leave the workforce" and the loss of those skills, trust, and social networks with an employer takes money and time to rebuild that up.
While the shutdown affected the least advantaged of society that do not have the access to resources (ie. low-skilled workers/hard labor workers), these low-skilled workers could also speed up the economic recovery. The less-skilled, less-educated service workers who have been laid off may have an easier time finding an equivalent job in a different industry than the highly specialized workers searching for a job that fits their skills and education. Though this really depends on which industries are recovering.
The issue of unemployment during this will test politicians as they argue on which how temporary or permanent this bout unemployment is and what policies that should be employed.
I never had thought about the impact of unemployment on low-skilled vs highly specialized workers. I do agree that the low-skilled workers may have an easier time finding new work in a different industry. I see a large problem in that the children of highly specialized workers who have recently become unemployed may have a harder time paying for college. Students may have to pay for more of their college tuition and take on large amounts of debt that could take years to pay off.
ReplyDeleteI agree with Ethan in that I have never really separated the impacts between the different skill levels of workers. While a lot of lower skilled workers may have lost their jobs, at lot of those jobs are "necessary" and will be most likely to hire during this time. Unlike more white-collar jobs where previously graduated college students can't even get a job because those companies are continuously laying off unnecessary workers.
ReplyDeleteThe impact of the corona virus will definitely have a giant impact on the future labor market that we are going to step into
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