Saturday, August 8, 2020

Three new Hires for every 10 Layoffs

“We find three new hires for every 10 layoffs caused by the shock and estimate that 42% of recent layoffs will result in permanent job loss,” writes Jose Maria Barrero, Nick Bloom and Steven Davis from the Becker Friedman Institute at the University of Chicago in a working paper titled “COVID-19 As A Reallocation Shock” published on May 5.

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Seen through this lens there are going to be a whole lot of people searching for jobs at the same time and many might not find jobs because of so many searching at the same time. As a result people often will have to go in new directions in order to find work. Most of the job losses are going to be in restaurants and in retail businesses nationwide and worldwide.

Since people are afraid to go inside restaurants or stores (rightly so) because of coronavirus, companies like Amazon and other online businesses will replace many or eventually all stores in time. The longer the coronavirus problem exists the more likely less and less and less storefronts remain in business at all. So, this is a real change to how people conduct their lives and will likely put over time many or most malls out of business the way things are presently going.

However, supermarket Store fronts where people buy food likely will continue because people still want to have food to eat even if they are no longer going to restaurants (at least inside). Restaurants that have outside eating (especially in nicer weather in Spring, Summer and Fall) will likely fare better than only indoor dining establishments unless those indoor dining establishments also do take out.

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