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42% of Jobs May Disappear Even After Economic Reopening

Jobs Disappear

Some states may be starting to reopen businesses, but there’s not exactly a rush to get back into stores on the customer side of this COVID-19 equation, and that could also translate into another dismal aspect of the state of affairs for employment: Some layoffs might be permanent for more reasons than one.  Hairstylists may be among the few whose jobs are safe, with stay-at-home restrictions keeping people from getting haircuts leading even to armed protests (in Michigan), where residents know what’s really important.  

The constitutional freedom to get haircuts aside, some other key jobs may be sidelined even when the pandemic is over. 

Against the backdrop of an additional three million Americans filing for unemployment benefits last week--bringing the total to 33 million Americans who have made claims in the past two months--it’s fair to ask whether some layoffs might be permanent. 

The current rate is 20.6%, a level reminiscent of the 1930s Great Depression. The pace of layoffs has slowed, and as parts of the US reopen those numbers should drop off, but for some industries, it could take months--or years--to see demand return to 2019 levels. 

That means many people will be out of jobs indefinitely. 

Airbnb said earlier this week it is laying off a quarter of its staff, or about 1,900 people worldwide. Uber also announced it would get rid of 3,700 jobs or 14% of its staff. Lyft has already laid off about 17% of its workforce, while some major airline companies have announced job cuts into the thousands. 

Goldman Sachs expects growth to rebound 19% in the third quarter and for the economy to be nearly recovered by the end of 2021. But not everyone will be spared: Some industries and sectors, such as traditional retail and business travel, may never fully recover.

Economists are warning that even when shutdown orders are lifted, consumer spending may be slow to recover and that the companies that intend to rehire workers will struggle to do so if the coronavirus outbreak lasts into late summer or fall.

Workers who lost their jobs are a bit more optimistic and the majority think they will return once the pandemic is over. 

A new poll by The Washington Post/Ipsos finds that 77% of laid-off workers expect to be rehired by their former employers.

Related: Politics Takes Charge Again With Immigration Ban Threat

The optimism is trounced by some analysts, however.  

A report by the Becker Friedman Institute at the University of Chicago projects that 42% of jobs lost in the pandemic is never coming back. And even if some jobs return, it’s not going to be immediate.

Former presidential candidate Andrew Yang told Business Insider earlier this month that many people that are being laid off during the coronavirus pandemic may not have jobs to return to. 

Yang said that a lot of companies that furloughed their workers are already automating many of their processes, while many public-facing businesses aren't going to come back at full steam.

“The fact is right now this virus is the perfect environment for companies to get rid of people, bring in robots and machines, and figure out how they can operate more efficiently,” Yang said. 

"We’re going to see 10 years worth of change in 10 weeks," Yang said, with companies adapting to fewer workers.

By Michael Scott for Safehaven.com

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