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Brace for it.
Along with massive unemployment, furloughs and pay cuts, there could be more bad news looming for workers due to the spread of Covid-19: a precipitous drop in wage growth.
America’s workforce should brace for the slowest pace of wage growth in recorded US history, writes Gad Levanon, head of The Conference Board’s Labor Market Institute for CNN Business’ Perspectives.
So just how bad are we talking?
Well, unemployment is a big driver of wage growth. And while the economy added 4.8 million jobs in June, the unemployment rate is still high at 11.1%.
Levanon said we can expect wage growth during the next year or two to be slower than the lowest point hit during and after the Great Recession.
To put it more bluntly, he said that would be the worst growth in recorded history.
Workers in sectors where social distancing is tough, like entertainment, travel and food services, are likely to be hit the hardest.
Not only will this make it more difficult for workers to make ends meet, it will also likely worsen the wage gap.
Click here to read the full story.
Japan’s job-for-life culture
Not every economy has taken as big of a hit as the US when it comes to Covid-19.
Just look at the jobs numbers in May, when there were still widespread shutdowns. Japan’s jobless rate was 2.9%. In the US, it was 13.3%.
How’s that possible?
Japan’s job-for-life culture plays a big role. While many Japanese companies are asking workers to stay at home, they are still paying them.
More than four million people in Japan were paid at least a portion of their salaries in May, even if they weren’t at work. That’s down from six million in April.
By law, Japan’s employers must pay at least 60% of wages during a company-mandated leave, reports CNN Business’ Kaori Enjoji.
Putting workers on leave has allowed the country to prevent mass layoffs, but some economists argue holding onto workers during economic turmoil could backfire.
Click here to read the full story.
Small businesses fear round two is coming
It’s been an incredibly tough few months for small businesses across the US.
And just as cities and states were starting to let them reopen, many are worried that they could be facing another shutdown.
That could be devastating.
There is growing concern that more government funding will be needed to keep small businesses afloat – especially if more states and cities close again.
“We, like many businesses, thought by the time the [Paycheck Protection Program] funds ran out and the loan payments were due again, we’d be out of the woods and able to operate quasi-normally,” one small business owner told CNN Business’ Jeanne Sahadi.
Read more about small business owners’ fears on what the future has in store here.
Survival mode: Adapt
Many businesses have been pivoting to stay afloat.
Covid-19 has changed the way we wine, dine, exercise and date. And companies are getting creative with their offerings, reports CNN Business’ Clare Duffy.
We’re talking to-go cocktails, delivery-only restaurants and direct-to-consumer movie debuts.
One California gym has found a way for members to still get their sweat on with proper social distancing: workout pods. Click here to see a picture.
The dating game also looks different these days. A new app called Quarantine Together asks users each day at 6 pm to verify that they’ve washed their hands before they can connect with another user. After 20 minutes of texting, users can opt to video chat.
Read more about the creative new business models and strategies here.
I don’t even like buying pants without seeing them in person first.
But some people are buying homes without ever stepping foot inside of them.
With stay-at-home orders and social distancing, wanna-be homeowners are relying on video and virtual 3D tours to house hunt. Home listings have also become more enhanced to give buyers a better sense of the home’s amenities and other features.
CNN Business’ Anna Bahney has more about what the process is like here.