The chart below of weekly initial US unemployment claims puts into context the scope and scale of the economic and employment impact of the pandemic.
The long horizontal scale of chart, giving us temporal perspective, actually hides the extent of the problem, with the spike at the end in fact comprising three weeks of new unemployment claims of first 3.3 million and then the last two weeks at 6.6 million, for a total of 15.6 million.
While similar very recent data is not readily available for many other countries, it is a safe extrapolation to judge that within the next week or two more than 100 million people will have lost their full-time jobs globally over the last two months.
Indeed the International Labor Organization says this quarter there will be a loss of work globally equivalent to 195 million jobs.
The most important and immediate issue is of course enhancing the social support mechanisms in each country to address the massive impact on those who have lost livelihoods.
Undoubtedly established paradigms for social support need to be and will be revised. The argument for a system akin to Universal Basic Income has been massively advanced, and approaches similar to this will gain currency.
In the longer term, more important is the path to rebuilding employment.
Companies in industries such as travel, tourism, hospitality, and events cannot resume business until social distancing measures are eased, with highly uncertain timelines on these.
Moreover, they are likely to be highly cautious about re-employing, knowing that fears of further spreads of disease could easily lead to a resumption of restrictions.
Yet those that re-hire sooner will be far better placed to take advantage of what will inevitably be a massive boom as things come back, with the timing albeit highly uncertain.
The “gig economy” will undoubtedly grow strongly, as those fresh out of employment seek ways to earn money, and organizations look for workers without the commitment of full-time employment in a highly uncertain environment.
Many organizations, as they better understand the relative merits of full-time and freelancer workforces, will realize that they can get far great value from talented workers if they are fully engaged and ‘in the fold’, and make them employees.
However as I have long argued, in a network economy there is an inevitable polarization of the value of work.
This too provides a strong argument for a Universal Basic Income-style system, which allows and encourages people to find ways to supplement a sustainable level of income using online platforms.
I would argue that the many organizations that have been too slow to adjust to a changing world over the last years have not only endangered their own survival, but also the future of their employees.
Every organization must now reinvent itself, even those whose business has been bolstered by the pandemic, simply because the world is and will be different in many ways.
Massive new opportunities
A positive lens on the situation for all organizations and entrepreneurs is that there is now more exceptional talent available on the market than at any time in history.
And as we hopefully all acknowledge, “as long as the universe is changing, there will be opportunities”.
There are a multitude of emerging opportunities to create value in new ways in this world. I will write about some of the new opportunity spaces in more detail in coming posts.
Moreover, the widespread adoption of remote work in fact makes many of these ventures more scalable than they might have been in the past, with the potential for very rapidly growing organizations.
Adaptability and entrepreneurial spirit
I am sure that humans’ indomitable entrepreneurial spirit will create many new businesses and additional employment in coming weeks, months, and years.
Some (but not all) leaders of established organizations will amply demonstrate their ability to adapt and improvise, and a horde of entrepreneurs will come up with new ideas and immediately embark on bringing them to reality.
Fortunately, adaptability and entrepreneurship are at the heart of what it is to be human.
This is always what has driven employment, and will continue to do so in this extraordinary new phase of humanity.