As parts of the U.S. and Canada begin to plan for the reopening of their economies, so to speak, one has to expect that longer term changes to the labour market will occur. The shut-downs because of COVID-19 primarily hit certain sectors, especially those in retail, tourism and services comprised mainly of small and medium sized businesses. As of the beginning of April, more than 7.1 million unique applicants have filed for the $2,000 monthly benefit under the Canada Emergency Response Benefit (CERB). In the U.S. at least 26 million Americans, or 15 percent of the workforce, have applied for unemployment benefits in the past five weeks, effectively erasing all job gains made since the 2008-09 recession. By the end of this month, unemployment rates in both countries will be getting close to double digit figures.
The hardest hit workers are women, part-timers and those in low paying jobs. Many full-time employees have had their hours cut back. At first, it was the private sector that took the brunt of the job cuts, but now one is seeing similar cuts in the public sector because of the shut-down of various government run services and the loss of tax revenues from both unemployed citizens and closed businesses. Despite the availability of government financial assistance, both the unemployed and businesses will find it difficult to function as usual even in the event of the reopening of various economic activities. For many, it may be too late. Bankruptcies will continue to climb as the closures continue. In addition, not all sectors will recover at the same rate, or at the same time.
As long as the threat of the coronavirus continues, with some experts predicting continuing waves in the fall, many consumers will be hesitant to frequent restaurants, retail outlets, hair salons, etc., etc. Consumption represents about seventy percent of the gross domestic product. With many consumers in financial difficulty, they will also be hesitant to begin spending right away. Then there is the impact of e-commerce on the retail and service sectors. The use of on-line services by consumers has almost doubled since the outbreak began. In addition, there has been a change in what we would define as “essential services”. Suddenly, delivery people and grocery store clerks have been deemed to be essential in order to keep vital services going. Some have suggested that people joining the essential workforce, because they have been displaced out of their current industries, might choose to remain in those jobs, at least in the near term.
It is anticipated that over the coming year, those manufacturing companies who converted to producing personal protective equipment, sanitizers, ventilators, etc., will continue to do so. There is a lot of uncertainty about COVID-19 and the degree of so-called “herd immunity” that might develop among those who have recovered from the virus. With no vaccine foreseen in the next year, a return to normal economic activity will have to be cautious with many restrictions remaining in place for businesses and consumers. The need to protect those who are employed in essential services will continue for months to come. Moreover, what we might see coming out of this crisis is a very different labour market at least in the short-term.
FROLITICKS 
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