On my personal Facebook recently, I posted a simple question: “How nervous are you, 1-10?” Most people seemed to be in the under-five range, but remember: U.S.-wise, where most of my social-media friends reside, this is/was still during the early stages of the pandemic. The number might rise shortly in terms of personal panic.
A lot of the personal panic is going to come from the job side of the equation. The tangible death-rate carnage could be awful, but those projections are going down (good), although the elderly are still the highest at-risk population. Phrased another way: If you are younger by comparison, you probably will not die. (Still, be safe.) However, you may well lose your job.
Without some type of stimulus package, the U.S. Treasury is estimating upwards of 20% unemployment. Best I can remember from middle-school math, that’s 1 in 5 people, which tracks with some new NPR work — already, in relatively early stages, 18% of American families have experienced a reduction in work because of coronavirus. In households making less than $50,000, that number is over 25%.
Recently, Dr. John Sullivan wrote about some of the potential recruiting impacts from the virus. Broadly speaking, the overall market is not good right now; I’d link you to something, but I think you already know that.
The Second-Order Effect
There is one natural conclusion that’s going to happen here, at least for the next six weeks or so: There will be a non-essential-role hiring freeze in multiple industries. (We may even see a short-term “all roles” hiring freeze.)
This is already commencing. The state of Alaska froze (not a pun!) all hiring, as did Delta (logical, as they’re an airline), and you’re seeing both hiring freezes and layoffs in multiple industries. We were also hoping at one point for a “IT hiring bounceback,” and now that’s also been delayed. Overall, there’s an expected massive global hiring slowdown to end Q1. Early Q2 will likely not be much better, but a bounce could come by the middle to the end of Q2.
Coronavirus is also decimating the conference and trade show circuit. Events are being cancelled more frequently than some people change socks. Say what you will about trade shows, but a lot of companies, especially in tech, use them as big lead-generation playgrounds. As more and more conferences get cancelled, the people within those companies in event-facing roles will quite likely be laid off. If they’re not (best-case scenario), there will be a hiring freeze for those positions.
So short-term, you’re going to be hiring less. With a bear market and oil issues in the Gulf, there won’t be aggressive growth targets in the near-term. Just this morning, The New York Times called the layoff outlook “bleak.”
This is the real effect of coronavirus. You can call it “second-order” if you want (health being first), but for a vast majority of people, second-order effects — on job and income — will have much more impact on their lives than the pandemic will have on their health.
America especially is very tied to work. What’s the first question when meeting almost anyone new? “What do you do?” You know the drill. A job is not only a source of money to attend J-Lo events; it’s a source of self-worth, relevance, and even (dangerously) identity. So when MGM and Laura Ashley are laying people off by the thousands, it’s an income problem (individual), an economic problem (policy), and a “meaning” problem (society).
What Do You Do?
As an individual, you do your best at your job until the axe falls, which hopefully it doesn’t. Use some savings. Hustle. Look for pockets where you can contribute. Offer your services to organizations that absolutely need recruiting help for when we eventually return to some semblance of normalcy.
For example, school systems. They won’t pay like the Fortune 500, but we’re not keeping children out of brick-and-mortar schools forever. If you can place Marty Middle Manager, you have the skills to place a high-school English teacher. (Believe me. You do.) So if that means one to two new checks rolling in, throw your services at industries and verticals where hiring will need to happen, even in a longer-than-expected downturn.
Will Bailouts Help?
As an individual, you might get a $1,000 check from the government. (Thank you, Andrew Yang!) But the average American rent in big urban areas is $1430, so that check will be gone pretty fast. Don’t pin your hopes there.
As for bailouts in specific industries? It makes some sense, although it’s a tricky moral issue. Look at airlines, for example. (Apologies in advance if you work for a major carrier.) The problem is that while airlines are essentially begging the federal government for bailouts right now, in the last decade they’ve spent 96% of their cash on buybacks. Buybacks traditionally benefit the top rungs of an organization and the shareholders; they do next to nothing for regular employees, who would probably rather that money go into increasing salaries or, at the very least, training opportunities.
A bailout that widens the inequality gap would be like a Band-Aid on the Hoover Dam. And remember this too: AI and automation are not at scale yet, but they are getting close. If we do bailouts and the rich get richer, you know what will happen in the next recession, perhaps five to seven years from now? Those jobs will go largely to algorithms and machines.
This is a unique moment in modern world history, for work and society. We need to make sure we’re making the right decisions to set us up for future generations having income opportunities. Right now the “leadership-industrial complex” seems like it’s falling on its face a little bit, but if we can weather the near-term storm, perhaps we will achieve some normalcy — and fewer layoffs and furloughs — by mid-summer, if not sooner.
Stay safe, strong, and ideally employed out there.