Home Bankrate.com 8 Ways To Help Rescue The Job Market From Coronavirus-Driven Unemployment Crisis

8 Ways To Help Rescue The Job Market From Coronavirus-Driven Unemployment Crisis

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Repair the economy, and you fix the job market: That’s been the tried-and-true recipe in recessions past for helping jobless Americans find their way back to work.

Not so much for today’s traumatized labor market, when ending the financial pain from the most devastating downturn in a lifetime — which put 1 in 4 U.S. workers out of a job at its worst — means addressing the virus that upended it and the new economic problems it opened up.

“The economy tanks when uncertainty goes up,” says William Spriggs, chief economist at the AFL-CIO. “Normally our economic collapses are from financial collapses. The uncertainty is that somebody messed up on Wall Street. But in this case, it’s the virus that’s creating the uncertainty, and if we do what we normally do, we get these spikes.”

Here’s eight possible areas that could help fix the worst unemployment problem since the Great Depression, driven by the coronavirus pandemic.

Faith Based Events

1. With schools and day cares closed, child care will be critical

While many schools plan to reopen for in-person instruction in the fall, others have announced plans to continue entirely online or a combination of the two. That’s going to pose a challenge for the nearly one-third of U.S. workers who have a child under 18 at home and an even bigger problem for single parents, individuals who can’t work remotely and others with younger kids. About 15 percent of the labor force belongs to one of those categories, according to an Aug. 2 research note from Goldman Sachs. It also disproportionately affects women and low-wage earners.

A lack of viable options for child care risks keeping workers unemployed for longer. An August Bankrate survey found that 15 percent of Americans would no longer be able to work and 22 percent would have to cut hours at work if schools adopt remote learning. Another near quarter (23 percent) say their career opportunities will be limited.

Even if child care centers reopen, they might not be equipped to handle the crunch. Ravaged by the shutdowns, about 1 in 5 employees in the industry have lost their jobs since August of 2019. Fear of spreading the virus also prevents parents from relying on grandparents or relatives.

Companies that have the means to expand paid leave resources for families will make a big difference, economists say, as will more flexible work arrangements. Larger firms such as Microsoft and Google have already expanded paid family leave opportunities. Meanwhile, school districts able to reopen safely with social-distancing measures while targeting which students can return to school will help alleviate the burden.

“Addressing child care needs is very important,” says Yelena Maleyev, an economist at Grant Thornton. “It doesn’t mean reopening schools at once or making it a ‘teachers, get your own mask’ kind of situation, but really thoughtful and data-based decisions on how to make sure the right groups that are maybe not as impacted by the virus return to school, so the parents can have a little bit more of that freedom to return to work.”

2. For workers afraid of going to work because of the virus, hazard pay could be an added incentive

As Southern states charged forward with reopening in early May, one conundrum became apparent: Some workers were so hesitant about catching the virus at work that they decided not to return at all, especially with a cushion from the supplemental $600 unemployment benefits.

Fear of catching the virus has proven to be a significant damper on the economy. Employers cut roughly 1.4 million positions in March, though states weren’t locked down for most of the month. Maleyev attributes some of that to the slew of canceled conferences and meetings out of fear of the virus.

“We were already starting to see that pullback before the policy was put in,” she says. “That’s just human behavior because of fear of the contagion, having vulnerable populations being scared of going back to work, which is understandable.”

An antidote to that could be something like hazard pay, she says, or some other type of bonus provided upfront to essential workers when they get back on the job.

Some states, including Vermont and Pennsylvania, have used a pool of money totaling $150 billion set aside for states and local governments through the CARES Act to introduce some form of hazard pay for essential workers. And as both sides of the aisle work toward passing another round of coronavirus relief aid, it could wind up being on the list of provisions. The HEROES Act, passed in May by the House of Representatives, specifically allocated $200 billion in hazard pay for essential workers, though Senate Republicans didn’t include it in their own relief proposals.

“Even giving them a $1,000 check upfront for support to say, ‘Here, you need to go back to work,’ that could help a lot of people,” Maleyev says.

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