People wait in line while SF-Marin Food Bank distributes 1,600 grocery bags in San Francisco on April 20, 2020. Work leave and layoffs caused by orders from coronavirus shelters cause thousands to seek food aid.
San Francisco Chronicle | Hearst newspapers via Getty Images
Given the pioneering federal measures to support the economy, we are likely to face a second wave of unemployment that will require sharp and systemic solutions to another impending crisis. While our nation's governors are grappling with the spread of the corona virus this summer, there is an insidious economic problem at stake: the second wave of layoffs.
When the pandemic hit, millions of Americans felt immediate and dire economic effects. Since the beginning of March, more than 40 million workers have registered unemployment. The congress was moving fast – it passed the CARES law and took numerous short-term measures to stop the economic bleeding – gave impetus, granted incentive loans and expanded and expanded unemployment benefits.
While we may not agree on the merits of these and other efforts to support the economy in a time of crisis, the reality is that each of them has an expiration date.
On July 31, the $ 600 increase in unemployment benefits for millions of Americans will cease to exist. Over the next month, according to a recent survey, many of the 4.6 million businesses that have borrowed money could lay off employees when funds run out. And on October 1, layoffs expire, linked to our $ 25 billion rescue of the aviation industry.
If these and other short-term economic props disappear, some degree of economic stability will disappear for unemployed and on-vacation workers, many of whom are trying to see the economic impact of the pandemic. In a vacuum, this could itself be a crisis, but it's more of a harbinger. During the fall and by the end of 2020, companies – small, medium, large, and in a variety of industries – will face difficult economic conditions and difficult workforce decisions.
The problem with "sugar highs" and short-term corrections
In executive circles, the reality of large-scale layoffs is viewed as anything but certain, and the available data indicate persistent difficulties for the economy. Earlier this week, Goldman Sachs predicted the US economy would shrink further than previously expected – at a rate of 4.6% versus 4.2%. United Airlines also issued a memorandum to employees signaling the risk of vacation and layoffs in the coming months.
If the effects of these and other political "poison pills" affect the workforce, they will have far-reaching effects on the US labor market.
Another series of Congress financial incentives could help in the short term. That alone will not fuel the kind of sustainable growth that policymakers expect from the post-COVID economy, and worse, it could result in a "sugar high". No capital injection will address an underlying reality to millions of workers who, months ago, when we were in the tightest job market in fifty years, struggled to keep up with the demands of a rapidly evolving job market.
Before the pandemic, research showed that seven out of ten employees have already fired workers because technology has made their jobs "irrelevant or redundant". Some estimates assume that up to 40% of lost jobs will never return. The pandemic has developed into what MIT economist David Autor has described as an "automation event". Workers desperately need new skills and training to find work or stay busy at a time when jobs are becoming scarce – and skills are becoming less durable.
Instead of just prioritizing the short-term economic stability of companies, Congress has to invest in the people who are most hurt. These investments should be made in the type of training that can increase resilience in the face of ongoing economic turmoil. In order not only to get America back to work, but also to bring it into the jobs of the future, changes must occur on both the supply and the demand side of the labor market.
On the supply side, we need massive new investments to ensure that individuals have the resources to pay for training programs. Our human resource infrastructure was weakened by decades of anemic investment long before the pandemic. This system is underfunded to support 3.5 percent unemployment in the pre-pandemic economy and is far from having the resources it needs to fund the education of tens of millions of workers represented by 11.1% unemployment . Many expect this number to increase in the fall.
However, public investment can not only focus on education: displaced, disproportionately low incomes and colored people who do not have access to social capital that so many of us take for granted when looking for a job, need coaching and career support. This support will enable them to successfully navigate through the stream of marketing materials and commercials from a labyrinth of thousands of sometimes unscrupulous commercial schools. In addition, federal policy makers need to recognize that transportation, childcare, and other factors too often affect access and success for displaced adults. Opportunity accounts can be a way to fill these gaps and provide the resources that enable underserved groups to take advantage of training and the many benefits.
Of the 7.1 million net jobs lost during the economic downturn after the financial crisis in 2007, almost all were filled by workers with less than a bachelor's degree. But only 3.2 million of the jobs added during the upswing went to this population.
Of course, the solution must not be left entirely to the government.
Closing skills and equity gaps will challenge employers to think differently. Seek talent in unconventional places and convey not only the skills and experience, but also the skills that potential employees want, in a way that enables them to target more precisely and reduce the cost of training.
The setting of potential as well as the family tree has the potential to create a more inclusive future. It will also remove the increasing wages and economic inequalities that have emerged from the great recession. Of the 7.1 million net jobs lost during the economic downturn after the financial crisis in 2007, almost all were filled by workers with less than a bachelor's degree. But only 3.2 million of the jobs added during the upswing went to this population – and the vast majority of them were people with an associate's degree or at least a university degree.
Employers who need a trained workforce can use creative funding tools such as Career Impact Bonds that expand access to high quality, career and job-oriented training. Employers must support the type of investment in higher education that enables workers to pursue careers and economic mobility, while recognizing that workers who do not fit well with historical talent representations can still have the skills they need to close existing skills. and equity gaps.
Coping with the second wave of the unemployment crisis also requires unprecedented collaboration between employers who are on the other side of the growing tide in the labor market. Because while many segments of our economy are imploding, others are growing. Employers on both sides of the spectrum of recruitment must be involved in a process that connects redundant workers with opportunities or sets a clear standard for achieving them.
In addition to the work of individual actors, displaced employers and training who rarely speak the same language to get together need a shared sense of responsibility to create a more seamless transition for workers. Coalition efforts such as the newly founded SkillUp coalition, which uses partners who address these problems from different perspectives, are a crucial way to address the situation on the ground.
The bad reality is that our country, which is already in the midst of a historic and in many ways unprecedented recession, will face further economic problems in the coming months. We have a better chance of recovering quickly and fairly if we use it sustainably. We have to overcome short-term corrections and avoid believing that just like the coronavirus itself, waiting is enough.
– By Maria Flynn, CEO of National Nonprofit JFF, and Jane Swift, President of Edtech Nonprofit LearnLaunch and former Governor of Massachusetts