Dear Fellow Survivalist;
Unemployment statistics due to the COVID-19 pandemic keep getting worse, week by week. Even with just over half of the states reopening, we’re still seeing a rise in unemployment. This is mostly due to small businesses which held off on laying off their employees for as long as possible, but are now forced to let them go as their financial reserves run out.
Currently, the count of people who have applied for unemployment due to COVID-19 stands a little over 36 million. This puts the actual unemployment rate considerably higher than the official figure out of the Bureau of Labor Statistics. We haven’t reached the point of the Great Depression yet, but we’re getting pretty darn close.
Supposedly, this is just a temporary situation, until states open back up again. But some governors are dragging their feet on opening back up, including a few who keep moving the goalposts. California’s governor has probably been the worst on this, now saying that the state won’t open up again until there’s s cure for COVID-19.
But nobody knows when or even if a cure is actually coming for this disease. While a lot of people are working on coming up with one, there are no guarantees. There are a lot of diseases out there, which medical science has been working on cures for years, but still haven’t grasped the brass ring.
So regardless of what these governors think, we’re going to have to open up without a cure. It’s just a matter of how soon they allow the businesses in their states to open their doors once again. Every day that they wait, means more small businesses who won’t ever be opening their doors again.
According to the most recent figures out of the Small Business Administration (SBA), an estimated 40% of small businesses will be shutting down permanently in the next six months, thanks to the effects of the lockdown. The “stimulus” package that was put out by Congress didn’t really help these businesses, as the small business portion was mostly about giving them money to keep paying their employees. If they used more than 25% of their loan to cover their fixed expenses, instead of to pay employees, they had to pay the loan back. With the small profit margin of most small businesses, that’s enough to put them under.
Forty percent of 30.2 million small businesses works out to over 12 million small business owners who will lose everything they’ve invested their lives into. The jobs of the employees of these companies aren’t likely to come back either. This means that it could take a number of years for us to get back to the pre-pandemic unemployment rate of 3.4%; and that’s if the government doesn’t get in the way.
According to a paper from the National Bureau of Economic Research, 42% of the layoffs caused by COVID-19 will become permanent. To put that in real numbers, we’re talking about 15,120,000 people who aren’t going to get their jobs back. Are you one of them?
Now wouldn’t exactly be the time to be out looking for a new job; nor will anytime soon be, for that matter. We’re talking almost double the 8.8 million jobs that were lost during the Great Recession of 2008/2009. It took a long time to dig our way out of that mess and it may take just as long to dig our way out of this one, depending on who gets elected in November.
Either way, you and I need to watch out for ourselves and our families. Even in the midst of the current struggles with lockdowns and protecting ourselves from the disease, we need to be looking to ensure our family’s financial security. Nobody else will.
If you’re out of work, then I wouldn’t be expecting to see your job coming back anytime soon. Rather, I’d look for some way to start a small business, something that can remain open in the midst of lockdowns. If you’ve got a job, I’d look for a side gig, something you can do from home. If you’re not stocked up on food and other necessities, I’d do so now, before prices can go up. Food prices are already going up, so the sooner you buy, the better. Save that money, if you can.
I would say we’re probably looking at several years of financial insecurity, just like we did after the housing crash in 2008/2009. Fortunately, we’ve got a president who understands business, so hopefully we’ll recover sooner. But it will be a process; it’s not going to happen overnight.
You’ve got to depend on yourself to get through this; you can’t expect the government to come through for you. It’s like keeping your powder dry and your survival gear close at hand; your survival is your responsibility.