We’re All in this Together… Are You Sure?


The U.S. labor market will probably be in a more positive place come the November Presidential Election, not great, but better than the one being battered by the COVID-19 pandemic this spring.

However, most Wall Street analysts think that even if the U.S. economy is back to creating jobs later this year as businesses stabilize, the unemployment rate will remain above 10%.

Legions of people will have to be retrained to support the jobs of today, which is one factor in the unemployment rate likely staying elevated. It will take time to make that happen, and experts believe the government may have to get involved with a major skills development program.

The other factor in play is that scores of U.S. businesses simply won’t survive the COVID-19 health crisis currently gripping the country. By extension, those are jobs that could completely go away. And another is that when businesses do reopen, they will be doing so with far less demand, lessening the need to bring back a large amount of their workforces.

So… expect the unemployment rate to decline slowly over the next 12-18 months. By the end of 2020, it will still be in the double-digits.  The economy will reopen, but it’s not going back to 100% pre-crisis levels of employment for a lot of these businesses. It will be a much slower process. Businesses will be  operating at less than full capacity for a long period of time.

As the election nears and campaigning kicks into high gear, these economic realities will produce brutal headlines for president Trump to navigate in the lead-up to the November election. 

Trump arguably hasn’t created the existing economic downturn, but by this fall people will be looking for clear plans to return the economy to pre-crisis levels.  Frustrations tied to the lack of jobs and sub-par wages could easily be expressed at the polls.

So what does the future look like?  If all things go well in the recovery, the U.S. unemployment rate could fall to 7% by the end of 2021. That would still be light years away from the 50-year low unemployment rate of 3.5% hit at the end of 2019.  To be sure, a 7% unemployment rate would be a great achievement compared to right now.

The U.S. economy shed a record 20.5 million jobs in April and the unemployment rate spiked to 14.7%, as the coronavirus pandemic forced businesses across the country to temporarily shut down and lay off or furlough workers. All sectors lost jobs in the month. Upward revisions took the total number of jobs lost in March to 870,000.  

The cry of the past 60 days has been… “We’re all in “this” together.”  Nice words, but how sincere remains to be seen. Leaders in government and business will be harshly criticized for the decisions they make as the economy begins to reshape into a new normal.  There will be many positive benefits for the workforce in the new normal, such as working remotely.

Rest arrived, for every benefit that comes from the new economy, there will be negatives that impact people, jobs, commercial real estate, travel and our ability, if not desire, to consume at the same levels of the past.

Those who have wealth, can get the ears of Americans and blame government for the current crisis. Case in point… a recent interview with the Bill & Melinda Gates Foundation co-founder Melinda Gates.  She blames the federal government for the nation’s economic struggles.

“We are lacking leadership at the federal level in the United States, and it’s highly distressing and disappointing to have 50 state grown solutions is insufficient. It makes no sense and it’s costing people their lives. It’s costing people their health.”

She added, “It it impacting families now because if we had good testing and tracing systems like Germany, we would have started to reopen slowly more places in the economy and people wouldn’t be struggling so much to put a meal on their table. The lack of action is really causing harm and hurt unnecessarily in this country. And I'm incredibly disappointed to see that.”

One person’s opinion.  Why is it that circumstances no one could have foreseen nor control, need to be the fault of government leadership?  

Many unemployed people may also be disappointed, and they will have a chance to vote those feelings come November.  Then, we will really know if “we really were all in this together.”

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