Adjectives help shape our understanding of what is happening and give perspective and color to what we see, hear or read. The descriptive adjectives being used to frame the economic impact of the Coronavirus include "staggering", "unprecedented", "historic" and unfortunately "worst". Adjectives also are used to get clicks and eyeballs to engage with content and media. So let’s put the adjectives aside and just look at some numbers to try to make sense of all this.
The first number today is 26 Million. That is the number of Americans that have filed for unemployment over the past 5 weeks. And I think that is a pretty amazing number when you consider that between November 2009 and January of 2020 our economy added 22 Million jobs to the payroll. In just 4 weeks during this pandemic, all of those 22 Million added jobs were whipped away and now another 4.5 Million Americans are without work. Going back to the adjectives, what is staggering is just how fast all of this happened.
The question everyone wants to know the answer to is how many more jobs will go away. Obviously no one knows for sure, but a Wall Street Journal article from Friday takes this on. They are projecting the unemployment number will rise to 27 Million or about one million more people from where we are today by the third quarter of this year. That will make the unemployment rate about 14% and just 8 weeks ago in February it was 3.5%. So wow.
But if we ease social distancing too fast and we get another spike in the pandemic, it could further spiral the economic impact and the job loss. And that 1 million could grow even higher. So what do we do? I think the answer is to always have a plan. In this case, what would you do if you got furloughed or you lose your job?
My plan has 4 steps:
1. Keep feeding your emergency savings with any extra money and curb unnecessary spending. We might need these dollars in a few months
2. Know where to go and what resources are available. Does your company offer severance, do they extend healthcare coverage for a period of time if you lose your job and how do you file for unemployment if you do get impacted? The website www.dol.gov has the resources you need to learn the steps for state and federal unemployment. Your company policies and benefit documents will help answer the other questions.
3. If you have 30 minutes, update your resume just in case. Keep it simple, no longer than 1 page and showcase your technical skills and leadership capabilities.
4. Spend a little time brainstorming what companies or side hustle jobs you could do quickly if you get impacted. I’m not talking hours here but just give it some thought so you are prepared to move if things happen.
If you are reading and in the 26 Million who have been impacted, first off I’m so sorry. This is terrible, stressful and I want you to know that you are loved and supported. Also I want you to know that this will be over at some point and we will start to recover. The hard part is we don’t know when and that uncertainty is terrible.
Maintaining an upbeat attitude is important as you spend your time and hard work towards finding your next opportunity. That should be your focus, that and taking care of yourself and your family as best you can. Make sure you have completed all the steps from the DOL website, work on your resume and spend your time searching for online and local opportunities. Call your credit card and loan companies to ask for short-term relief and make sure you are staying connected to loved ones for support and to talk things through. It is so hard but keep fighting!
The next number is $3.7 Trillion. That is the projected federal budget deficit we will see by the end of September. The deficit was only about $1 Trillion in the last 12 months at the end of this March. It doesn’t have to be said but I will anyway, that is so much freaking money and so much debt! A budget deficit just means that our government is spending more money than it is taking in.
This is all because Congress has passed spending bills to give Americans money directly and help businesses, large and small, get loans and money to stay afloat. Basically our government is propping up large parts of our total economy in hopes of preventing a big recession or depression. But what does that mean in the long run?
Well economists debate this pretty aggressively but generally most people believe that if you have growing deficits year-after-year (and we do) that eventually your economy will have to experience either increases in taxes to get more money coming in or face higher inflation or both. If any or all of those things happen, either we have less money in our pockets or the money we have doesn’t buy as much as it used to. Yikes!
If taxes go up or our dollar doesn’t buy as much, what do you do? Well first you have to have a great handle on where your money is going. That means looking at your spending plan (or budget if you like to call it that) each month and prioritizing the essential items. These are your debt payments, food, housing, etc. If you have to spend less, do you know where in your plan that will come from? It is good to have an answer to that.
The other option here is to make more money to offset the higher taxes or reduced spending power of the dollar. You can do this through a job change but that might be risky right now given the unemployment numbers we just talked about. Also you can supplement through side hustles. Check out the past Calm Cash Podcast episode on Side Hustles if you want to learn more.
13% is the next number. This is the increase in fraudulent attempted transactions online by criminals in March 2020. And the 13% is expected to continue to rise the longer the pandemic continues. This number is only counting attempted online account fraud which is a ripe opportunity for bad guys because so many more people are shopping online due to social distancing.
What this number does not address is the number of scammers trying to get people’s IRS stimulus payments because we don’t have that number quantified. Phishing scams are also on the rise as are people setting up fake charities and requesting relief and donations. I’m not even going to talk about the number of fake remedies to cure COVID that are blowing up social media. The bottom line is bad times bring out the bad guys who use fear and uncertainty to try to prey on people.
So first, be skeptical of phone calls and emails about your IRS payments or orders you may have placed. Make sure you hover your cursor over links in emails before clicking to make sure they don’t have weird web addresses. Additionally, consider changing your passwords to banking institutions and online shopping sites where you store credit card information.
Lastly, a couple of podcasts ago we talked about our credit score and its importance. I also mentioned that you get a free credit report once per year. Well AnnualCreditReport.com is now offering free weekly credit reporting. Here is their statement: “During these times of COVID-19, accessing your credit is important. That’s why Equifax, Experian and TransUnion are now offering free weekly online reports through April 2021”.
This will not affect your credit score and it is a great way to make sure that your accounts and overall credit are not the subject of theft or fraudulent activity. This does happen far too often. I know a great guy here in Dallas named Josh who is a consultant. Someone in Tennessee (sad to say my home state) stole his identify and bought a $71,000 Ford Raptor truck. They even took out car insurance in Josh’s name to do this. It took months for him to get this resolved and the headaches and hassles were crazy. Take the necessary precautions to prevent yourself from going through something similar! Protect your passwords, monitor your accounts and stay skeptical!
The last number for today is 2021. Specifically second quarter of 2021. This is the estimate for how long it is projected we could be practicing some degree of social distancing in our working and social lives. This was also from the Wall Street Journal and when I read that I was pretty floored. That just seems so long from now, but it will be necessary because the experts think that the virus is going to come back again, potentially in several waves over the next one year forcing us to keep our distance like we are doing today.
What can you do about it? I think just be mentally prepared. Maybe we will have windows of time where things get relatively back to normal, but I am preparing to have more stretches of working from home and not being able to see my friends and family in person. And I hate that but we have to deal with this new normal.
This potentially extended time apart is going to create mental health challenges for many people. I hate that too. So now more than ever, you have to practice your gratitude, mindfulness practices like box breathing, meditation and practicing being in the moment and know your resources if you need more help coping. Remember that your company may provide mental health resources, sometimes called EAP, Employee Assistance Programs or counseling programs, and if your employer doesn’t provide these you can check out the National Alliance on Mental Illness (NAMI) website for information on how to find a counselor that can help.
Take care of your self and each other. Stay safe, stay healthy, and stay positive. There are good things happening in your life and in the lives of many other people. We just have to focus on the good.
- Ben
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