America is dramatically unprepared for the economic shutdown we’re currently facing as the nation grapples with coronavirus, and one recent survey illustrates just how serious the problem is.
When the Society for Human Research Management surveyed American workers from March 12 to 16, they found that 60 percent of respondents would not be able to meet their basic financial needs if we had a month or less of quarantine.
Some are in even worse shape than that, with one in five people saying they would not be able to afford their rent, groceries and essential bills like water and electricity after a mere week of quarantine.
With some areas of the country already entering their third or fourth week of quarantine, it’s scary to think what could be lying ahead.
The Society for Human Research Management’s CEO, Johnny C. Taylor Jr., said: “This has a real impact on people’s lives and it’s creating a level of stress that cannot be overstated.” He added that this pandemic is posing more challenges than the financial crisis of 2008 and that the situation is widely expected to get worse before it gets better.
One small comfort is the fact that the survey took place before Congress passed a $2 trillion stimulus package, which the survey group said may help to mitigate some workers’ financial problems.
The package includes one-time checks of $1,200 for many individuals plus $500 per child. It also sets aside $250 billion for an unemployment insurance program with expanded eligibility and an additional $600 per week for workers on top of the benefits paid out by state programs.
It’s not just individuals who are suffering; small businesses are also feeling the pinch. Half of American small businesses say they simply cannot afford to pay their workers for an entire month under quarantine conditions. One in five say they can’t even afford to pay their employees for more than one week under quarantine. On top of that, more than half of the small businesses polled say they’re expecting revenue losses of between 10 and 30 percent.
The stimulus package does have some concessions for small businesses, such as a $350 billion small business loan program known as the Paycheck Protection Program.
It may also be difficult for many employees to adhere to social distancing guidelines, with more than half of American workers reporting that they cannot perform their jobs remotely and a third of small businesses saying that none of their business processes can be carried out remotely.
Some industries are being hit harder than others. Perhaps not surprisingly, workers in physical industries like construction, transportation and manufacturing are expecting the greatest impact, with 72 percent unable to meet their basic financial needs in one month or less of quarantine.
Those in the service industry are also suffering, with 62 percent of those in food, retail, accommodation and education unable to meet basic financial needs in one month or less.
People working in knowledge industries, however, are faring better. Just 38 percent of people working in insurance, finance, government, research and law are anticipating financial difficulties.
This virus is having a serious impact on economies all around the world, and it’s underscoring the importance of preparedness. Many people who once made fun of those who are smart enough to have a stockpile of money, food and supplies are learning some hard lessons right now, and while it’s too late in many ways to get everything in order now, perhaps those of us who make it through this tumultuous time will be better prepared should something just as devastating happen again in the future.
Sources for this article include: