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U.S. sees second wave of significant job loss; experts weigh in on what could stop the cycle

U.S. sees second wave of significant job loss; experts weigh in on what could stop the cycle
Posted at 3:05 PM, Sep 03, 2020
and last updated 2020-09-03 16:05:42-04

The United States is at the beginning of a second wave of significant job loss.

“We are seeing a resurgence in layoffs that has been quite clearly indicated in the last couple of weeks,” said Daniel Alpert, an adjunct professor and senior fellow at Cornell University.

Cornell University recently published a study showing about a third of the people who went back to work during the pandemic have now been laid off for a second time. Another 26 percent of workers have been warned by their employers that future furloughs and layoffs may soon come.

“The problem is that you get an echo,” said Alpert. “So, if you have a resurgence in layoffs, a decrease in spending, that creates more contraction on the part of businesses, which creates more layoffs. The question is, when can you put a floor under this spiraling situation? It is a classic economic spiral.”

The cycle--of job loss eventually leading to more job loss--is causing some to fear it could lead to a third wave of unemployment in a few months. Experts, like Alpert, believe the only way to stop the cycle would be a vaccine or for Congress to come together on another stimulus bill that props up households and businesses until a vaccine is released.

“We are very concerned about the current rollercoaster effect on resumed layoffs, but longer term, we are really scared about seeing huge numbers, tens of millions of businesses vanish,” said Alpert.

The more waves of unemployment we see, the higher likelihood of that.