While the U.S. job market has been extremely healthy in recent years, there is rising concern that the COVID-19 outbreak could unravel parts of the economy. As the government continues to refine its containment strategy, some businesses are already fearful that they may not be able to retain employment at its current levels. It’s only natural for current job seekers to fear that they may have an even harder time locating a great job! In this post, we will examine the current U.S. job market and the coronavirus’ potential impact on hiring.
Of course, it’s important to note that the situation is changing with each passing day. At all three main levels of American government–federal, state, and local–officials are monitoring the virus’ spread and adjusting containment strategies accordingly. With that noted, however, there can be little doubt that many Americans will be further impacted by this novel coronavirus pandemic. And it is nearly certain that the U.S. job market will feel that impact as well.
Current Forecasts For Hiring and Firing
Direct Impact from Official Mandates
As policymakers respond to the outbreak, the direct impact on business is already clear. In states across the nation, many governors have moved aggressively to limit community spread. In states like New York, Massachusetts, Washington, and Iowa, those executives have banned large gatherings and ordered restaurants, theaters, bars, and other high-traffic businesses to temporarily shutter their public operations (though restaurants are permitted to continue to serve food via drive-thru, carry-out, and delivery service).
Experts generally agree that the mandates are going to negatively impact future job numbers–at least in the near-term. As Marketwatch reports, there are already early estimates that 3 million people have already lost their jobs directly due to the coronavirus outbreak. Most economists expect that the combination of social distancing, forced closures, and supply-chain disruptions caused by panic-buying could lead to even more layoffs in the near-term.
Recent layoffs include at least 145 Los Angeles port drivers, more than 100 employees from an Orlando stage-lighting firm, the entire workforce in one Seattle hotel department, and roughly 50 employees affected by the cancellation of Austin’s South by Southwest festival. Employees at travel outlets and one Los Angeles visa service have also been laid off as business declined due to travel restrictions.
The Most Affected Groups So Far
To date, most of the job losses seem to be targeted toward younger workers, as many companies adopt a last-hired, first-fired approach to layoffs. Entry-level workers and independent contractors appear to be taking the brunt of these early layoffs, as companies scramble to ensure that they can continue to employ veteran and full-time employees. That has placed many part-time and temporary workers at risk for losing valuable working hours.
Meanwhile, recent analysis from Moody’s Analytics suggests that as many as 80 million American jobs are at moderate to high risk due to the virus’ potential impact on the economy. As CNN notes, that’s more than 50 percent of the United States’ estimated 153 million jobs. 27 million jobs are forecast to be at high risk, including those in industries like oil drilling, transportation, hospitality and leisure, travel, and temp services. Moody’s estimates that as many as 5 million of those 27 million workers could feel some impact–either through layoffs, wage cuts, or reduced work hours.
52 million of those 80 million at-risk jobs are believed to be at moderate risk due to the virus. That includes jobs in manufacturing, retail, education, and construction. Moody’s analysis suggests that as many as 5 million workers in those moderate risk industries could end up losing substantial hours or becoming unemployed.
A Hiring Freeze in Many Areas of the Economy
As the response to the virus ramps up in intensity, a de facto hiring freeze has taken root in many areas of the U.S. job market. A recent Moody’s survey found that only 12 percent of surveyed businesses said that they are now hiring. That represents a significant decline from last December’s 41 percent, and suggests that many laid-off employees could struggle to find new jobs.
Perhaps even more alarming, the virus-induced slowdown is putting many small businesses in jeopardy. The speed of the changes has left already-vulnerable small business at risk for closure, due to rapidly-declining revenue. That includes businesses like restaurants, bars, theaters, bowling alleys, dry cleaners, hairstylists, and other smaller mom-and-pop firms that rarely have the resources big companies can rely on to survive a sudden downturn in economic activity.
Rays of Hope Amid the Gloom
At the same time, however, some areas of the economy are continuing to see growth in hiring. For example, Amazon has announced its plans to hire as many as 100,000 new delivery workers and warehouse personnel at a starting wage of $15 per hour, to enable the company to meet rising online retail demand caused by the coronavirus pandemic. In addition, grocery chains across the nation are also hiring stock personnel, cashiers, and delivery drivers.
In like manner, the healthcare sector of the U.S. job market will continue to see strong demand for workers. The industry already had a personnel shortage prior to the outbreak, with hospitals, clinics, and other providers short an estimated 1 million employees. On LinkedIn alone, more than 170,000 jobs in healthcare have been added in the United States over the past week. Other high-growth industries are listed in the following infographic.
Perhaps more important is the fact that the United States entered this crisis in a fundamentally strong position. With unemployment at 50-year lows and more available jobs than employees to fill them, any downturn caused by the coronavirus is likely to be short-lived. As Darrow Wealth Management Managing Director Kristin McKenna observed in a recent Forbes article:
“The bear market was caused by the COVID-19 outbreak and not a systemic collapse of the financial system. This is a really important point to keep in mind as it’s highly probable that whenever this passes, the economy will be able to recover rather quickly. There are signs that the government will make efforts to help ensure that hourly workers and those not able to work remotely will receive some sort of aid, which will help limit the extent of the downturn and help boost the speed of the recovery.“
During this time of uncertainty on a national and global scale, there will likely be many people looking for new employment opportunities in the short-term future. So far, we’ve seen changes in the ways people are working and the ways companies are hiring: remotely. Career experts predict that this trend will continue long after quarantines are lifted.
While many signs are point toward more layoffs across most industries, there are still essential job functions that must be filled. The job market is not at a standstill: many companies are still looking to fill roles, and many job seekers are looking for work. Be prepared for a rise in online applications, video interviews, and online networking. Most importantly, stay poised for a competitive job market once this hiring freeze has thawed.
This article was written in collaboration with Ken Chase, who has 15 years of experience writing about the economy, fintech, tech trends, and career advice.