As we move through 2020, a clearer picture is emerging of the economic impact of the COVID-19 crisis. In this article, we explore the implications for the US labor force and examine the disproportionate impact on ethnic minorities.
COVID-19 has triggered global economic devastation on an unprecedented scale.
According to a report published by Statista, the COVID-19 pandemic has caused significant harm to the global economy. In the UK, the GDP shrank by a staggering 20.4% between April and June 2020, with household spending plummeting as shops closed their doors and factory output plummeted.
The economic impact has been disruptive in the United States.
The financial implications of COVID-19 have impacted markets across a variety of industries, ranging from travel and shipping to recruitment.
According to statistics published by the Bureau of Labor Statistics, in April 2020 alone, the US unemployment rate rose by 14.7% following the loss of 20.5 million nonfarm jobs. This culminated in unemployment claims rising from typical levels of around 200,000 per week to a peak of nearly 6.9 million by the end of March 2020.
Between March 21 and May 9, 2020, a total of 36.5 million Americans had filed for unemployment insurance, placing unprecedented demand on the Congressional Budget Office, as costs skyrocketed from $3 billion in April 2019 to $49 billion in April 2020.
The Washington DC-based think tank Urban Institute predicted that if unemployment rates rose to 20%, about 25 million US citizens would lose access to employer-provided health insurance. Of this group, although 6 million people were expected to find private coverage, the institute estimated that 12 million would need Medicaid coverage and warned that an additional 7 million Americans would become uninsured.
The CARES Act was ratified to protect affected individuals, families, and businesses.
The Coronavirus Aid, Relief, and Economic Security Act, which was passed by the Senate on March 25, 2020, provided health care response and emergency assistance to people and organizations impacted by COVID-19.
The CARES Act effectively created a $2.2 trillion economic stimulus package designed to counter the negative impact of COVID-19, increasing unemployment benefits by $260 billion and providing $300 billion in one-time stimulus payments to US citizens.
As part of an effort to support employers and thereby protect US jobs, the package also provided $350 billion in forgivable loans to small businesses under the Paycheck Protection Program, as well as $500 billion in aid to large corporations and a $339 billion investment in local and state governments.
While many sectors have faced hardship, some have witnessed growth.
According to statistics published by McKinsey & Company, 53 million Americans could face layoffs, a reduction in pay and hours, and temporary furloughs in the shutdown phase alone. The shockwaves have reverberated through all industrial sectors, from leisure and hospitality to construction.
Nevertheless, some industries have experienced unanticipated growth, with manufacturing, retail, professional services, and non-essential health care experiencing increased demand.
Analysts predict that the crisis may create permanent consumer changes, with workers vulnerable to the current economic downturn overlapping with those susceptible to future workplace automation. Experts anticipate that the crisis could actually speed up automation and help to put employees vulnerable to job losses on more promising and sustainable paths through the development of new skills and occupational shifts.
Ethnic minorities have been disproportionately affected.
CultureBanx CEO Kori Hale predicted that since a disproportionate number of people with low incomes are ethnic minorities, they are poised to bear the brunt of the economic crisis triggered by COVID-19. In an article published on the Forbes website, Hale explains that many minority employees live below the poverty line and possess few assets, impeding their access to low-interest lending. Quoting a study by Pew Research, she pointed out that with the average median wealth of white Americans being more than 10 times greater than that of their African American counterparts, the current economic downturn will only widen this gap, with the wages of blacks and Hispanics sinking below the poverty level.
Censia introduced its ReadyToHire program in May 2020.
The Talent Intelligence Platform launched its ReadyToHire initiative in direct response to the COVID-19 crisis, helping to connect employees displaced by the pandemic with companies experiencing urgent hiring needs.
Censia’s intuitive Ideal Candidate Model algorithms effectively eliminate unconscious bias from the recruitment process, helping companies to access the most talented individuals for a particular role, irrespective of their socioeconomic background, religion, sexual orientation, or ethnicity.
Censia provides candidates and recruiters with a comprehensive range of recruitment tools, many of which are free of charge. The main goal of Back to Work is to help in-demand employers meet their workforce needs, simultaneously connecting displaced employees with highly sought-after roles and providing opportunities for professional growth and fulfillment.