With the predicted economic downturn, many white-collar office workers should be concerned. This will be different from the coronavirus recession that we experienced. Here’s what you need to know about how inflation and layoffs will impact white collar workers.
Mild Recession
A large number of economists expect a mild recession to materialize in 2023 and signs point to it resembling the recession of the early 1990s. During that economic slump, white collar (high income office workers) faced a heightened risk of job loss. On the other hand, blue collar sectors like manufacturing and mining fared much better than in previous recessions.
Changing Times
In the past, office workers were protected, and blue-collar workers were the most vulnerable. However, it is quite the opposite now. Changes in business models and software mean that the blue-collar workers are more in demand than the office workers. This is often due to the fact the blue-collar workers are consider highly skilled now.
White Collar Sectors are Vulnerable
Industries that have fully recovered from the job losses caused by the pandemic may be more vulnerable during a recession. Industries like professional and business services have adequately recovered from the coronavirus recession but this may mean they have less room to grow or, they may have overexpanded during the pandemic era. Either would lead to struggle during an economic downturn.
Another concern is with interest rate sensitive sectors. Mortgage lenders, for example, will face significant risk of job loss if the economy slows further. These businesses enjoyed a record-breaking situation when homebuying skyrocketed in 2021 and early 2022. But now the economic backdrop has flipped. Mortgage rates are at their highest levels since 2008 and home demand has dropped drastically. This could have serious impacts for these workers.
Blue Collar Jobs Still in Demand
Many blue-collar sectors have only just recovered or are still clawing their way back from pandemic job loss. This gives them more flexibility to continue hiring and avoid massive layoffs in the event of a recession.
Employment Lawyer Northern Virginia
No one can say for sure exactly what 2023 will bring us. But there are things you can do to prepare for either scenario. For all of your employment law needs, please contact Cook, Craig, and Francuzenko today.
