How the Government Can Reduce Unemployment Amid COVID-19

The COVID-19 pandemic has forced millions of people across the country out of their jobs and businesses. Millions more had to take pay cuts or reduced hours in order to keep their jobs. Unemployment is at a record high, and it is still uncertain when the pandemic will end and life will return to normal.

But people still have to put food on the table, pay rent, and keep the lights on and the water running. Utility bills, mortgages, and various loans were able to be deferred in the earlier months of the pandemic. Governments also offered financial assistance in the form of stimulus checks. However, many deferral periods are ending and the stimulus is often not enough to support a family’s needs. Without proper income, many people, especially those living below the poverty line, may face even more hardship down the road.

Government action plays a huge role in reducing unemployment amidst the global health crisis. Here are several recommendations on how local and national governments can boost employment and help affected workers and businesses recover from the effects of the pandemic:

Hire more manual laborers

Manual laborers were not as heavily affected by the pandemic as the workers in other industries, particularly in hospitality, tourism, and retail. After all, houses still have to be built, cargo still needs to be shipped, and industrial plants still have to keep running, even in the face of a global health crisis.

Local governments can boost employment in their communities by hiring more manual laborers for public offices and projects. Alternatively, they can incentivize the private sector to hire more manual laborers and help support the local economy in the process. Manual laborers are essential in almost all industries and are more likely to find jobs in companies such as Lakeside Manufacturing and other private entities. That said, their presence in the workforce should be highly valued.

Increase support for community colleges

Boosting support for community colleges that offer in-demand job training can help recently unemployed workers transition to new jobs or careers in the future. Students will be able to adapt their skills to the rapidly changing labor demands in the country, as well as prepare them for the still uncertain future.

Providing substantial support for community colleges also increases the pool of candidates for businesses, which helps ensure that businesses can find skilled workers that are necessary for their productivity and efficiency.

Provide credit

The reduction of revenue caused by COVID-19 has millions of businesses struggling to maintain working capital. Borrowing money from financial institutions is a viable solution to this problem, but banks and lenders are reluctant to lend to businesses due to the uncertainty of everything and the increased likelihood that the loans won’t be repaid.

The government can encourage lending to small businesses by increasing funds from the central bank. This action will also be more effective when governments encourage private lenders to delay repayment on existing credit to take some burden off businesses. To convince them further, they can be provided with extra liquidity and reminded of the fact that late payment is always better than no payment at all.

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Deferral of government payments

Like utility bills and rent, government-mandated payments from businesses can be deferred. This includes property taxes, income taxes, social security program contributions, among others.

Offering a deferral on these payments will help businesses keep enough working capital that they need to survive. As a result, they will be able to keep employees, and perhaps even hire more when revenue picks up.

Aside from boosting employment, this strategy is one of the many ways that the government can support the economy and help curb the financial effects of the COVID-19 crisis.

Improve job security

In the US, employees have no self-standing job security rights apart from a 60-day notice before a mass retrenchment occurs. People can get fired for any reason–sometimes for no reason at all. The pandemic has highlighted how truly absent job security is for American workers, which is why improving workplace security is one of the most important steps in ensuring that this doesn’t happen again.

The government could amend labor laws with specific attention to dismissals. If employers had to follow a stricter policy for dismissing employees, they won’t be as keen to fire people for unjust reasons. And if the reason is economic, employers will have to shell out a redundancy payment.

These programs and suggestions could prove effective in boosting employment and helping businesses stay afloat, at the very least. While the pandemic is still raging across the U.S., it’s more crucial now more than ever for both local and federal governments to pay more attention to the unemployment plague that is sweeping the country along with COVID.

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