COBID-19 impact on tech jobs!

MHamim

It is quite clear that almost all big economy including US are already in recession due to to COBID-19 outbreak. Thousands of people have already lost their jobs because of shutdown of small businesses and stock market crashed.

If we really enter a 2008 like recession, how the tech job situation will be like? How was that is 2008?

JDMurray

This is nothing like 2008. The 2008 situation was (mostly) caused by bad investments by US banks in a much weaker US economy; that is not this situation at all. The US economy is fundamentally strong and the strength of the US dollar is actually causing economic problems for other countries. The current situations with very low oil prices and China's bad economic numbers for Dec/Jan are not due to the COVID-19 outbreak.

Having said all that, I think IT people working in the retail and restaurant sectors will have the most difficult time maintaining employment. Many more retail stores are expected to close in 2020 than projected before the COVID-19 outbreak. Businesses that were looking for an excuse to downsize personnel anyway will now have a great excuse to do so.

JoJoCal19

JDMurray said:

This is nothing like 2008. The 2008 situation was (mostly) caused by bad investments by US banks in a much weaker US economy; that is not this situation at all. The US economy is fundamentally strong and the strength of the US dollar is actually causing economic problems for other countries. The current situations with very low oil prices and China's bad economic numbers for Dec/Jan are not due to the COVID-19 outbreak.

Having said all that, I think IT people working in the retail and restaurant sectors will have the most difficult time maintaining employment. Many more retail stores are expected to close in 2020 than projected before the COVID-19 outbreak. Businesses that were looking for an excuse to downsize personnel anyway will now have a great excuse to do so.

This event has a really good potential to cause a situation far worse than 2008. The biggest cause of the Great Recession was the housing market crash (tons of factors involved in that too). With the amount of businesses that are possibly going to shutter and people that are possibly going to go unemployed, what do you think is going to happen to all of those mortgages? The potential housing market crash could be far greater than last time around. Now while some regulations have been put in place and bank capitalization requirement is much different, the overall effects of the bottom falling out of the housing market is still just as bad for the overall economy. And the potential for all of the carnage is much higher due to the circumstances of companies not just shrinking workforces, but going completely out of business. I'm certainly hoping it doesn't get to that point. But to summarily dismiss it is not wise.

JDMurray

2008 was caused by an uncontrolled and unrealized economic situation that was never a threat to human life. 2020 is a very carefully planned situation that is being deliberately rolled-out to save human life that has some very bad--yet predicable and survivable--economic consequences. You can liken the difference between discovering that you have swallowed a unknown, poisonous substance whose full effect on your body you don't know and taking an experimental chemotherapy drug to kill a new disease. One is a controlled situation and the other is not.

What both 2008 and 2020 share is a huge uncertainty of when their economic affects will be ended and things can return to business-as-normal. The US government seems to believe that it can sustain the US economy through this crisis by continuing to print money backed only by its reputation and future capabilities as perceived by the rest of the world. Today's very strong dollar is an indication that the US is successfully paying its way through this economic situation so far. This high confidence is created by a strong White House in 2020 and not hindered as by the hopeful novelty White House we had back in 2008.

bigdogz

I think if it hits recession, it will be temporary.

@JDMurray is correct about the economy. If it was flat for the last 3 years we would be in bigger trouble. Is it bad -yes, but it could be worse. Bush (43) and Obama used Quantitative Easing to try to stimulate the economy. In the long run it failed.

The housing market was messed up because banks made bad choices for people who could not afford houses they made buyers use the Adjustable Rate Mortgage (ARM) which is what killed the industry. When the interest rates were higher, people could not afford their houses.

I remember that our real estate agent and our bank was pushing us on the ARM. I told my wife I wanted a steady mortgage rate so I know what I had to pay each month.

Everyone has to practice washing clothes when they come from a store or work and keeping a safe distance from others in public areas.

I really think that the government, business, and citizens have to work multiple avenues to 'lower the curve'.  This reminds me of citizen involvement during WWII, not that I was around.

The problem is the lower and middle class who are still living paycheck to paycheck. A lot of people do not save up money for times like this. I remember how my grand parents had lived because they were in a depression and I guess I have been a bit of a miser so I can afford situations like this one.

Government mitigation:

- working public and private sector to facilitate protective equipment for first responders (nurses, doctors, police, fire men/women)

- stimulus to give citizens tax break which is not immediate.

- People will get $1200 per adult and $500/ per child. I really think more will come but

  it will have to be requested by the state level (who will then go to the federal

  government) as 90% of business are smaller mom and pop businesses.

- People can dip into their 401k's without any interest or penalty for 3/4 months.

- Deploying 2 military medical ships to CA and NY for assistance. They need a little

  work as the maintenance of these vessels was neglected for 12+ years.

- Trying medicine to fight the virus.

The biggest problem is the safety of how younger people have a laissez-faire attitude and think that this will not effect them. College students were having Spring Break in Florida and someone had the common sense to stop them. Why the beaches were still open is another reason and comes down to control by the local city, county, or state.

The US is blocking people from coming into this country from other countries via Canada and Mexico. Preventing others from entering unless they have work visas and only doing 'necessary business'.

Another issue is that most of the pharmaceuticals are from other countries, mostly China. As everyone can see now that it is a weakness to rely on other countries to produce items of need. Companies being cheap verses our national sovereignty and security of our health may be looked at now or later. Who knows, this may change...