Pandemic may lead to layoffs and debt problems
When the Great Recession hit, a large number of consumers across the United States lost their jobs. This experience plunged many people into serious debt, contributing to a spike in bankruptcy filings. The ability to file for bankruptcy to get help in these situations was a great relief for them. Today, the growing pandemic may well be poised to create similar economic problems.
Forbes reported that a number of layoffs and hiring freezes have been announced by many companies spanning a variety of industries. Workers at the South by Southwest festival, airline employees, employees of the Port of Los Angeles and more have already lost their jobs. A major restaurant services provider has also indicated it has let some employees go. Other domestic airlines have put hiring on hold for the moment as they look to reduce flights.
USA Today indicates that the number of layoffs reported thus far may be significantly less than the actual number. In addition, it is expected that more layoffs will come in the following days and weeks. Many will hope that the layoffs will be temporary and that companies will be able to bring people back to work once the outbreak has been contained, but there is no guarantee of that happening or no idea as to when it might happen if it does.
Entertainment, tourism, personal services and retail businesses may be among the first to experience significant job losses. Many major companies have announced the closing of retail locations for a period, and while some may pay employees for now, not every company can afford to do this.