The unemployment rate has reached a record high as tens of millions of jobless Americans look to the government for support.
That support arrived in the middle of the pandemic to over 40 million Americans with an extra $600 a week in federal unemployment benefits (on top of the standard amount given by their state).
Fast-forward to today and that period of extra cash is almost expired, which begs the question,
“What will happen when the extra $$ runs out and what does this mean for businesses?”
Below, we’ll share our insights into what could happen to the economy when the extra $600 provided by the CARES Act runs out in late July.
To start, let’s consider the current state of the average unemployed American. At this moment, they’re averaging around $378 a week in state unemployment benefits plus an extra $600 from the federal government, bringing the total to nearly $1000 a week.
With the average American household income at just below 60K, bringing home 1K a week without having to work is a pretty hard gig to give up. With that framed in your mind, let’s begin the good, the bad and the ugly of what COULD happen after the end of July (cue the theme song from the movie!)
Reopening the economy has been an ongoing debate over the last month with mixed results and a world of uncertainty. As more businesses reopen, workers will more than likely be in high demand. The good news is that if COVID-19 cases drop (and that’s a big “if”), the economy continues to unthaw AND the extra bump from unemployment ends on schedule, we could see a massive influx of Americans ready to work. This would be fantastic news for employers eager to get operations back to pre-COVID levels.
In this scenario, the economy continues to grow but at a snail’s pace due to rising COVID cases. At the time of writing, the U.S. has nearly 2.4 million confirmed cases. The bad news is that if cases keep rising, businesses are not as likely to open, putting a damper on employment. By the time July ends, there still could be millions of Americans with no job and no extra $600 to live off. The silver lining in this scenario is that progress will still likely be made in the economy, just slower than anticipated.
For the record, we are all crossing our fingers and toes, hoping this scenario doesn’t come to reality but it’s definitely in the realm of possibility. The ugly news is that the U.S. could get hit with another massive wave of COVID-19 infections, striking yet another painful blow to the economy and our population.
In this grim scenario, the economy would likely freeze causing many businesses to face closure (temporarily or permanently), or worse, go through another round of layoffs/furloughs.
The Bottom Line
All of these scenarios are completely speculative and have too many unknown variables to take an educated guess as to what will happen come the end of July. One thing that is certain, is Bear Staffing’s ability to help your business find, attract, and ultimately place quality talent. When the time comes, we’re ready (and highly qualified) to put the nation back to work.
Struggling to find the talent your business needs to navigate through uncertain times? Bear Staffing is here to help.
Our team of industry experts has substantial experience connecting organizations with top-tier talent across multiple industries. Call us today to learn more.