It Was One Year Ago That Our World Dramatically Changed
Here's Where We Are Now!
At the start of February 2020, I wrote:
We Are In One Of The Best Times Of The Year To Find A New Job
Now that we are in February, the real work starts. The holidays are a pleasant and distant memory. The cold, hard reality kicks in that we’re all back in the office with a lot of work to catch up on and there are no vacations in sight. It's a sobering, back-to-reality period of time. This can actually be good news for you, if you’d like to land a new job.
Why This Season Is A Perfect Time To Start Searching
There are solid and practical reasons as to why starting in February—and throughout the springtime—is a great time to actively engage in a job search.
Budgets and new head counts have already been approved by companies. Bonus payments, which are a large portion of total compensation in many industries (such as Wall Street), are starting to be paid out. The conversations surrounding yearly reviews and raises have been held. Now, people act upon it. Those who receive their bonuses quickly cash them and are free agents and mobile. If you were passed over for a promotion or given a poor performance review, it means that you’ll likely seek new opportunities. This contributes to the start of the game of musical chairs, in which people seek out new positions that will create open seats that need to be filled.
That’s how it used to be. I’ve recruited for over 20 years and February was a great time to start a job search. Little did I know what was coming next.
By the end of February, it turned into:
How The Coronavirus Can Impact Your Job And Savings
Sometimes, the unfortunate happens. Both life and work seem to be going well. Then, before you know it, you’re thrown off your course and your world is turned upside down.
We’ve been hearing about record-high levels of employment and an amazingly hot stock market for the last few years. Your 401(k), children’s college savings plan and brokerage account were steadily growing uninterruptedly. You probably felt secure in your job (unless you’re at a certain age and salary level, as there’s always worry and angst about being shown the door). It's not perfect, as you have to contend with ridiculously high college tuition payments, real estate taxes and other burdensome financial obligations. All in all, however, work and life seemed pretty good. Then, out of nowhere, it all changed.
A distant voice talked about some virus in China. At first, it blended in with all of the other global issues that we’re usually tuning out like white noise. The outbreak started growing worse, but still we felt immune—literally and figuratively. China is a concept to us. It's far away and alien to our society and culture. Suddenly, the coronavirus became real. A large number of reports from a wide array of countries claimed that their citizens contracted the virus and many have died from it.
If you had a chance to watch videos or view pictures leaked out of China and posted on Twitter before they were censored, they were undoubtedly terrifying. Our eyes were opened to “wet markets,” where live animals, including dogs, cats and bats, are openly sold for consumption. China has an authoritarian government and the virus was dealt with swiftly and harshly. Millions of citizens were quarantined in their cities. Travel was restricted or banned. Businesses grounded to a halt. Global commerce from China was severely impacted. The global supply chain was knocked offline.
Once the chain reactions of the outbreak and the economic ramifications took hold, the United States and other global stocks markets were hit hard.
According to BofA economist Aditya Bhave, “Extended disruptions in China should hurt global supply chains. Weak tourist flows will be another headwind for Asia. And limited outbreaks, similar to the one in Italy, are possible in many countries, leading to more quarantines and weighing on confidence.”
It was easy for stocks to fall since they were at precarious high levels due—in part—to little other alternatives to invest in with bank interest rates at historic low levels and unbridled optimism by many that stock prices will keep rising. Well, they did until they didn't.
For now, things may still seem like they always were. However, the coronavirus can change everything. When you start looking at your investment accounts, you’ll see the drop in value. If the stock market sell-off continues, each month, you’ll grow increasingly concerned as you lose even more money.
Wealthy individuals, institutions, hedge funds and other savvy investors who made fortunes on paper will aggressively sell their holdings en masse to lock in gains before it's too late. This will spur a panic selling, as people will all want to head out the door at the same time.
Corporations are going to start cutting back. They will halt any new business initiatives, as they’d rather wait for better future clarity. Hiring will cease. Management won’t want to bring on new people—unless it's an incredibly important need—as they become fearful of the future. There is no need to add new employees when business conditions are deteriorating, they’ll say.
Many corporate executives will contemplate large layoffs. They’ll figure that it's cost effective to lighten the load and save costs by jettisoning people. It's cold-hearted, but top executives need to protect the interests of the company and have enough money left for their large bonuses.
The cascade of downsizings and pullbacks in new business ventures will grow as the media amplifies fear. As it's the presidential election season, politicians will invariably point to the worst-case scenario and blame their opponents for either causing the problem or allowing it to grow.
The toxic combination of media peddling fear and politicians looking to score political points by exaggerating matters to stoke anger at their rivals will exacerbate the already-tenuous stock market, economy and job market.
Hold on tight. It may be frightening for a while. However, we’ve demonstrated time after time in this country that we can overcome adversity and prevail. This situation may last a few weeks, several months or longer. Stay strong. History shows that Americans are smart, industrious and inventive when our backs are up against the wall. We’ve always managed to find the ways and means to combat deadly diseases, outbreaks and epidemics. It may not happen overnight, but we will find the right vaccines and antidotes and life and work will turn around and get back to normal.
By March, The Situation Started Looking Scary And Bleak
Things are looking bleak. The media rattles off an alarming increase in the numbers of the people who have contracted and died from the Coronavirus. The press offers macabre minute-by-minute updates of the ever-increasing casualties.
The United States stock market dropped thousands of points and was down over 10%. CNBC breathlessly covers the dramatic drops in value and upticks, as if the stock market is a sporting event and not your retirement funds and college plans for your children.
There are pictures of shopping stores that have been picked clean, stoking fear. Online, you see large lines forming at Costco to purchase supplies, in case of a disaster.
It's easy to succumb to the fear of the crowd when everywhere you turn there is negative news. The hard part is to keep your head when everyone else around you starts going into panic mode.
Here are some bright spots on the horizon. You will have to manage your expectations about what will happen next. It's highly likely that the next few weeks and months will be rocky. The coronavirus is something scientists and the medical community have not encountered before. They don’t yet know its cause nor do they currently possess an antidote or vaccine. It's unreasonable to believe that life will play out like the movies, our medical heroes and heroines immediately find a cure and save the day. The reality is that this will take time.
During this in-between period, there will be uncertainty and fear with brief pockets of hope. We will find a cure for the coronavirus. America may have its faults, but we’ve consistently demonstrated our ability to overcome great obstacles. Putting aside petty political disagreements, our society and culture fosters helping others. Capitalism offers the financial incentives and rewards for coming up with solutions to serious problems. The combination of the two bodes well for us and the rest of the world. The best and brightest people in the medical community, biotech professionals and healthcare officials are all laboring on finding a solution to this outbreak.
We went into April and things grew worse.
30 Million Americans File For Unemployment In Under Two Months, Over 3-Million Filed Last Week: It Looks Bad, But Don’t Give Up Hope
What would you think if I told you that 3,839,000 Americans filed for unemployment benefits last week—and it's sort of good news? From mid-March to now, we’ve seen roughly 30 million people file for unemployment benefits. After reports of over 6 million filing, going down to around 5 million, the recent report of under 4 million looks somewhat less dreadful.
The recent total unemployment numbers are almost too large to comprehend. It's especially jarring since, up until recently, the United States economy boasted over 100-plus straight months of uninterrupted record-setting job growth. Once the Covid-19 pandemic erupted, businesses were forced to close and people told to stay home. The health crisis quickly caused a crashing economy and collapsing job market.
There Is Light At The End Of The Tunnel
Top-tier investment bank Goldman Sachs predicts a boom in hiring. A confluence of positive events, including the rollout of vaccines, massive amounts of financial stimulus injected into the economy, a very positive February jobs report and accumulated savings of people who’ve been staying at home for the last year, will converge to create the “coming jobs boom,” according to Jan Hatzius, Goldman’s chief economist.
Hatzius contends, "Another key reason we expect a quick labor market recovery is that two-thirds of remaining pandemic job losses are in highly virus-sensitive sectors, where employment should rebound as the economy fully reopens. The sharp increase in the virus-depressed leisure and hospitality category in last month’s employment report provided an early hint of things to come."
Around half of the 22 million jobs that were lost during the early dark months of the outbreak have been recovered. There are still nearly 10 million more Americans unemployed compared to a year ago at this time. Goldman and other prognosticators say that we will reclaim these losses and even exceed prior levels of employment.
The Goldman Sachs forecasters also anticipate a pick up in the job market, as the virus recedes. They contend that “most workers who left the labor force still cite the pandemic as their reason, and will likely re-enter once life normalizes.”
According to Bloomberg, “Wall Street’s most bullish economic forecasts hang on a simple prediction: everybody will flood back soon to their local gyms, bars and yoga studios as if the pandemic was in the past. A jobs boom in the vast U.S. service sector – the nation’s largest employer ranging from software developers to the local Chipotle – is a central part of bold calls on growth this year.”
U.S. Treasury Secretary Janet Yellen, in an interview with MSNBC, forecasts that the economy will return to pre-pandemic payroll levels by 2022, attributing the anticipated passage of President Joe Biden’s $1.9 trillion stimulus package.
After a long tough struggle, it looks like the job market will finally turn around and potentially do better than where we were pre-pandemic. This is great news for job seekers and those who wish to advance their careers.
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