The pandemic severely affected low-income jobs in mainstream industries such as hotels, restaurants, and retail however now we are noticing a similar trend spreading in high-income jobs. When corporate level layoffs increase it’s a pure indicator of the economic impact of a recession and tells us that there is a traditional recession happening beneath the surface of this public health crisis. The white-collar job cuts are increasing as we move further in this pandemic. Big insurance company Allstate announced that it would layoff about 3800 workers. ExxonMobil plans to layoff 1900 workers, mainly at the headquarters in Houston. Raytheon a major defense contractor plans to layoff 5000 workers, mostly corporate employees, and contract engineers. Similarly, people working with state and local governments are also at risk because of the reduced budgets.
Economists argue that this is a secondary impact of the pandemic which will slow down the recovery process as layoffs ripple across different industries. Generally, in recessions, higher-wage workers are better off since they have stable jobs and savings. However, increasing layoffs in the white-collar sector during a recession can be very impactful because they spend the most. Are we moving towards a white-collar recession?
4 comments:
I think that a lot of these cuts have been a long time coming since the start of the pandemic. Businesses have been postponing these layoffs by getting rid of their normal operations workers and help from the government stimulus. It will be interesting to see how this continue in the next few months and if we have any government intervention to try to help theses businesses stay afloat. I don't know if this will turn into a "white-collar recession" per se, but I think we will begin to see more of the middle class struggle. Theses struggles are dependent on what field the individual works in as some are not nearly affected as others. There is also the vaccine factor, even though this may be an optimistic look at the situation.
I don't think we can say for sure that the recession is turning into a white-collar recession as of yet. And though it is clear that the people who hold these more stable and high-income jobs are now being affected, they are overshadowed by the tremendous amounts of low wage and essential workers who have been terribly affected by the pandemic, economically but also when thinking about health care for example. It's fair to say that Layoffs in the white-collar sector are now inevitable as the pandemic persists and even worsens in terms of the number of cases and the death rates in some states. There will be impacts on the economy as this sector continues to be affected, however, assuming a recession in the sector might be too far-fetched as of right now.
This definitely appears to be a more concerning indication of where the economy is headed in the pandemic. Given that the lay-offs of restaurant workers in the beginning of the pandemic seemed temporary, as restaurant owners claimed they would re-hire these workers once the pandemic was over, cuts in corporate jobs seem concerning. It is possible that large corporations are doing so under the same logic that restaurants initially used — claiming that they would eventually re-hire these employees. Unfortunately, this seems slightly less plausible, as it is harder to reinstitute jobs for white collar workers, which require skills that are not as easily transferable to other corporate offices. For instance, if a restaurant waitress gets fired from her job, there are several other restaurants where she could apply these same skills. For a white-collar employee, however, it may be a little harder to pack up your bags and transition to another corporate office.
i agree with you chase in that a lot of these layoffs where on back order. I am not surprised that blue collar workers are losing their jobs in a time that firms are looking to down size in order to minimize cost the first jobs to go are the unskilled workers jobs. I am very surprised that their is an increase in white collar job cuts. That being said I don't fear to much for the white collar jobs because they are usually the first to get hired because they are skilled labor
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