We Have Some Much-Needed Good News For You!
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 the February employment report provided an early hint of things to come."
Goldman is highly optimistic about the economy, calling for an almost 8% increase in U.S. growth. The chief economist believes that the unemployment rate will drastically drop to around 4% by the end of 2021.
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 the United States 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.”
“Nationally, employment in residential construction, package delivery and warehousing now exceeds pre-pandemic levels. Manufacturers have steadily added back jobs after slashing payrolls last spring, though employment remains down about 5% from February 2020, according to Labor Department data. Job openings in many blue-collar occupations broke above pre-virus levels last summer and remain significantly elevated, figures from the online job site Indeed show,” the Wall Street Journal reported.
Other economists are equally enthusiastic. RSM chief economist Joseph Brusuelas said, "In mid to late year, you will see job gains of above a million per month as people stream back into the labor force."
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.
To put things into perspective, for the February 2020 jobs report, right before the start of the pandemic, I wrote, “The Labor Department reported that the U.S. economy added 273,000 new jobs. The unemployment rate, at 3.5%, is one of the lowest in over 50 years.” The leading gainers in job growth “occurred in healthcare and social assistance, food services and drinking places, government, construction, professional and technical services and financial activities.” We are now at a 6.2% unemployment rate.
After a long and 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.
The New Year Will Usher In A Roaring ‘20s With A Renewed Exuberance And More Jobs
The Roaring ‘20s
We are eerily retracing history. From 1914 to 1918, the United States and the world witnessed the horrific carnage of the “Great War,” now known as World War I. Toward the end of the war, in 1918, a vicious virus ravaged humanity. The outbreak caused more deaths than the combat. The “Spanish Flu” of 1918 to 1919 led to the deaths of about 50 million people worldwide—representing nearly 6% of the population.
Despite the dreadful years, after the war ended and the virus subsided, it brought in a new era—the Roaring ‘20s. This time period was marked by a new sense of optimism. There was an overall feeling of a brand-new dawn. Prior traditions seemed antiquated and everything looked possible. There were new technological inventions, the Jazz Age and Harlem Renaissance started, arts and culture flourished, people were dancing, drinking and enjoying life to the fullest.
We may see something similar happen in 2021. UCLA economists are optimistic about the new year. They call for an initial “gloomy COVID winter and an exuberant vaccine spring.” Thereafter, the university predicts the U.S. will realize “robust growth for some years.”
After the vaccines are rolled out, there should be a new feeling of confidence and exuberance. The fear over contracting the disease will slowly dissipate over time. When you’re in the middle of something terrible, it feels like it won’t ever end, but eventually it does. It's hard to fathom going out without a mask and enjoying a concert, but it will start again, as people are social creatures and enjoy being around others.
As 2021 progresses, it's likely that many people will remain concerned about Covid-19 and continue to wear masks, stay indoors and avoid human contact. There will be an equally large amount of people who will be exhilarated to start living again. They’ll want to go to restaurants, bars, clubs, sporting and music events—similar to what happened during the Jazz Age.
Here is what we can expect in the coming year:
More Jobs
When the vaccine, coupled with wearing masks and social distancing prove to work, we’ll see a rapid change in our collective mindset. People will become more positive and optimistic. They’ll want to go outside and enjoy themselves.
Economists have noticed that Americans have been saving their money, as they are no longer engaging in the behavior of the past and don’t spend as much. The stock market has been hitting new record highs, as investors are betting on a brighter future.
Corporate executives, excited about moving from a pandemic era into a new epoch, will feel the animal spirits and grow their businesses. When management believes things are looking rosier, they’re more apt to initiate projects, launch new business lines, acquire other companies and hire new people.
There will be a lot of pent-up demand by the consumer. Their spending will help businesses. This will create a positive momentum. Companies will scramble to hire to stay one step ahead of their competition.
Hybrid and Flexible Work Days
It's likely that the work-from-home trend will continue through 2021. Many people will be afraid to take mass transit into work and say they refuse to go into the office. It will be too hard to bring back workers all at once, especially as there’s legal liability risks for the companies. Corporate executives need to be concerned with possible lawsuits if their workers contract Covid-19.
A hybrid scenario in which people work a few days in the office and several at home, such as Google is offering, may become the new standard. Sundar Pichai, the CEO of Alphabet, Google’s parent company, said Googlers “won't be back in the office until September 2021—and even then they probably won't be in every day.”
Pichai informed his staff that the company plans on implementing a "flexible workweek" once people start returning to its offices. The company will have people work at least three days in the office and the rest remotely. Pichai said about this initiative, "No company at our scale has ever created a fully hybrid work force model—though a few are starting to test it—so it will be interesting to try." Google hopes this hybrid work model will offer a better experience to its employees.
This scenario would be nice for workers. They’ll have choices instead of being demanded to embark upon long commutes into the office. People will have a better balance and quality of life. As Google is a business leader, most other companies may follow its lead.
With remote work taking hold, job seekers can now apply to positions outside of their commuting distance. If a person resides in Nebraska, she can now ask to be considered for a role based in Silicon Valley. The remote-work revolution will open more opportunities for people to advance their careers and not be restricted to only the jobs that are within a certain close proximity to their homes.
The Rich Get Richer
The pandemic has swiftly increased wealth and income inequality. Online companies, such as Amazon, Google, Facebook, Netflix, Microsoft, Apple and Zoom, have performed amazingly well and the executives are richly rewarded. Other sectors, such as those in the hotel, travel, hospitality, airlines and brick-and-mortar retail shopping have done poorly.
We’ve seen a K-shaped recovery, in which the wealthy are getting even wealthier. Everyone else is on a downward slope, financially. Billionaires have reaped unfathomable amounts of more money. For instance, Elon Musk and Mark Zuckerberg are now members of the $100 billion club, as their respective share prices rose 677% and 39%. This is happening as millions of average Americans lost their jobs and many families struggle to make ends meet.
White-collar professionals who were able to work from home did relatively well, whereas those in low-wage jobs—who couldn't—have lost out. The trend of the rich getting richer looks like it will keep going strong, unfortunately.
People who work at the online giants that hold near-monopolies in their sectors stand to gain, although not as much as the CEOs and founders. Workers in non-tech companies or hard-hit industries, including hospitality, airlines and retail stores may continue to struggle. Over time, travel will resume, restaurants will be allowed to reopen and workers in these sectors can expect to see more jobs becoming available.
Big Government Keeps Control
Politicians have taken more control during the pandemic. Critics say that they now have too much power and have become petty tyrants. They complain of capricious rules and regulations that aren't fair. People are told to stay at home, but there have been numerous instances of the very same political bureaucrats violating their own edicts.
Out of fear, a large segment of the population has ceded their basic rights for what they believe is safety. Others will start vehemently fighting for their rights. We’re seeing this play out with small businesses complaining and protesting that their livelihoods have been destroyed.
The elected officials and bureaucrats will impose even more rules and regulations. This will be a boon for people who work in the public sector, as well as professionals in compliance, legal, regulatory, audit and related roles. Additionally, as healthcare has been brought to the forefront during the pandemic, there will be an abundance of job opportunities available.
Companies and Residents Leaving Big Cities
New jobs will spring up in the suburbs and smaller cities, as there was a trend in 2020 of people leaving large cities, such as New York, Los Angeles and San Francisco. They’ve moved to suburbs, places that have lower taxes, less crime and not as crowded and where schools are open for their children.
For example, a combination of high taxes, poor governance on the part of New York City Mayor Bill de Blasio, ever-increasing crime, capricious business and school shutdowns and a resurgence in Covid-19 cases contributed to Goldman Sachs’ recent decision to move its large money management division to Florida. The absence of a state income tax, plus warm weather and a business-friendly mindset, has already prompted hedge fund billionaires and native New Yorkers Paul Singer and Carl Icahn to relocate their respective businesses to Florida.
By the end of 2021, if there isn't another Covid-19 resurgence, there could be a return back to the cities. As the prices of apartments in major cities have significantly fallen, intrepid folks may view this as an opportunity to return to New York.
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