The Impact of Recession on Employment

The threat of a recession makes everyone pull up their sleeves and do something. Well, whether you are in big business, an entrepreneur or an employee this problem affects everyone. Certainly, if you are looking for a job or even if you already have one, you should try to examine the impact of recession on the employment of workers.

The Center for Economic and Policy Research states that the looming recession will raise unemployment by about two to three percent depending on the severity of the recession. This means that there will be about three to five million unemployed Americans in case it happens.

On the other hand unemployment data doesn’t represent the educated workforce. For them, the truth is there are more available jobs than there are candidates and the unemployment rise affects mainly the low-skilled workers. At most, this is the unemployment impact of the perceived recession this year.

Companies differ to a certain degree on their outlook regarding the hiring of additional workers or streamlining their workforce. There are companies who think their concern is on the difficulty of looking for skilled workers who would help boost their efficiency. Others implement a freeze on hiring. There are even companies who have laid off some of their workers. These realities are also seen even during normal times but presently, these moves are made with extra caution and rigid analysis.

Companies which depend so much on banks for their operations and have problems meeting their obligations are the ones greatly affected by recession. As such they make drastic moves to save the business including cuts on their workforce. On the other hand, there are businesses which express optimistic outlooks and have not been affected by the looming recession. The Bay Area agencies for instance, expect that they will be steady while a nationwide survey states that 83 percent of agencies said their budgets have not been affected and they expect an increase in revenues this year.

It is therefore up to the agencies concerned to make careful analysis of the situation and make whatever appropriate action they would make with regards the status of their workforce. It is hard to make a general recommendation like to continue or stop hiring. It would also be very foolish to discourage people from applying for a job. The present predicament does not present a bright outlook for employment opportunities but the uncertainty teaches us to be prepared and as much as possible to be able to adjust. There are still job opportunities waiting for those who are qualified.

As we have mentioned, the impact of recession is unpredictable and depends entirely on the severity of the recession. The lessons learned on past recessions have somehow helped us trace the patterns and given us ideas on how to solve the problem. Employment is basic in the socio-economic and political life of the country. Unemployment is one of the worst effects of recession and government, with the help of the private sector should be able to come out with plans and actions to at least minimize unemployment.