2020-05-20 — yahoo.com
Permanent job losses are likely to be a feature of the eventual U.S. recovery, according to University of Chicago research, which estimates that 42% of recently unemployed workers will not return to their jobs amid the "profound" shock stemming from coronavirus lockdowns.
researchers at the U of C's Becker Institute for Economics have painted a dour picture of the labor market reallocating those lost positions. Calling the crisis a "major reallocation shock" across all major economic sectors, the authors found that for every 10 coronavirus-induced job losses, only 3 were created.
Some employers -- primarily Amazon (AMZN) and Walmart (WMT) -- have hired en masse to deal with temporary demand spikes, yet the Chicago study suggests positions created during the COVID-19 crisis are unlikely to offset the labor market's extreme bloodletting.
The lockdowns have cratered activity in an economy that consists of 70% consumer spending, while undoing all of the jobs created since the great recession ended.
Although the pandemic is perceived as a "one-off" event -- albeit a big one -- economists are warning the impending changes to the economy will result in long-term behavioral shifts, and likely to see mass bankruptcies.
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