In recent weeks, the unemployment rate has soared to 14.7 percent, the worst since the Depression era. More than 20 million people lost their jobs in April, with many experts fearing this economic damage is just beginning. Now, business leaders, workers and policymakers are scrambling to adapt to these unprecedented changes to the economy and workplaces.
SHRM has long studied and analyzed workplace trends through cutting edge research. However, the novelty and severity of the changes and challenges engendered by this pandemic demands a timely and tailored approach to reporting the latest economic and workplace developments.
This urgent need for data-based insights into the pandemic’s ever-changing impact is precisely why SHRM and Oxford Economics partnered to create the COVID-19 Business Index. The index, released every two weeks, helps decision-makers from both the public and private sectors track and understand the key changes and trends reshaping the world of work.
The first round, released May 4, examined the workforce changes employers made in response to the pandemic. Notably, it found 32 percent of U.S. employers had furloughed or laid off hourly workers, while 20 percent had furloughed or laid off salaried workers.
The second round, released today, provides an even sharper—and more alarming—picture of this economic pain.
During the pandemic, U.S. workers have lost an estimated $1.3 trillion in income—roughly $8,900 per worker. However, it’s essential to note that job-loss isn’t the sole cause of this lost income. Twenty percent of that $1.3 trillion ($260 billion) represents lost earnings of those who have remained employed and had their hours or salary reduced. In other words, there is more to the economic pain than the eye-popping unemployment figures might suggest.
In addition to calculating lost income, the latest findings also forecast a longer road to recovery. In many places, jobs that have were lost in a matter of weeks will take years to return. Based on the latest COVID-19 Business Index findings, Oxford Economics expects that even by as late as the end of 2022, only 20 percent of large metropolitan areas will have recovered to the employment levels of early 2020.
The latest index shows the damage done by COVID-19 is both deeper and longer lasting than many experts anticipated. The world we had just months ago—of low employment and bullish markets—has vanished and left employers and employees alike stranded in a strange, new normal.
Understanding and mapping this emerging reality is perhaps the most pressing and urgent task before us. In the coming weeks, the COVID-19 Business Index will continue to provide that perspective, based on the latest data, and prepare leaders to weather the storm and lead the recovery to come in its wake.