High-contact industries are unable to recover as the pandemic refuses to slow down and nobody knows for how long?
With people still being confined to their houses the COVID-19 crisis has taken the driver’s seat as far as controlling the U.S. economy is concerned.
The repercussions have been felt in the hospitality and leisure sector as more jobs are being lost. Feeling the heat in the COVID-19 crisis are restaurants and bars as people are avoiding going out to eat and drink. Ultimately, the labor market seems to be nose-diving with each passing month.
According to the monthly employment report from the Bureau of Labor Statistics, about 372,000 jobs have been lost owing to the confinement of people in their homes.
A See-Saw Effect
Restrictions to stop the spread of coronavirus might have curbed the infection with most people staying indoors but on the other hand, it has taken a heavy toll on the labor market. The preceding months are likely to continue the trend in the jobs market as the pandemic affects the entire economy.
Vaccination can be a silver lining only if it is widely distributed and the fear of contracting the coronavirus dies. For high-contact industries that depend mostly on outdoor service, herd immunity seems to be the only way out in case the vaccines are delayed.
Light At The End Of The Tunnel
Some sectors like construction, manufacturing, professional/business services, and retail, however, have been adding jobs and that’s indeed a promising sign.
The other supporting factors have somehow kept things going with the stimulus offered by the government including the economic rescue package of $600 stimulus checks.
Joe Biden’s promise of additional government relief as soon as he takes up charge in the office is something of a temporary hope.
The recovery during the month of December in the U.S. labor market again showed a downward trend with 140,000 jobs lost. The most vulnerable being the bars and restaurants as the winter weather has aggravated the problem for high-contact industries.
According to a report by the Bureau of Labor Statistics (BLS), 498,000 jobs were lost in December in the leisure and hospitality sector and three quarters were from bars and restaurants.
Unemployment Benefits v/s Economic Relief
Unemployment benefits have always been an effective stimulus as they help in injecting money back into the economy through food, rent, and medicine by recipients. With more job losses in the pipeline, unemployment benefits act as a cushion by circulating the money in the economy.
In contrast, lack of relief means a shortage of money in the economy and less demand for goods and services which in turn leads to more layoffs and reduced spending.
As of now, unemployment benefit seems to be the perfect rescue option for the economy and the people.
Life Beyond The Normal
The battle against coronavirus is getting longer by the day and relying on the government is just a small part of the entire problem being faced by people in terms of money.
Savings take center-stage at this point in time and tightening the purse is the ultimate solution to pass through the pandemic.
The job market will take a while to recover from the COVID-19 debacle and having alternative access to funds becomes vital for survival. The first and foremost step is to minimize your spending and maximize your savings. Stop unwanted expenses and you get to literally stick to this principle no matter how hard it is.
Make use of emergency funds wherever possible to keep a check on how much money you are blowing out. Focus on things that need attention and be positive in handling the financial crises.
While you might have experienced an existential crisis before, the pandemic is altogether a different problem that has been affecting mankind both physically and psychologically. It must be noted that there is something to take away from the current situation we are dealing with. Understanding the true value and importance of saving money at all times can help you protect yourself from any money-related issues in the future.
So keep smiling and let your savings do the talking!
By Karthik V