What could a coming recession mean for your work?
Most important points
- Many experts predict that the country will soon enter a recession.
- Some employees may be hit harder than others.
- White-collar workers could bear the brunt of the recession.
A period of economic downturn in the United States seems almost inevitable. In fact, many business leaders and financial experts are warning of a coming recession or claim that we may already be in it.
Recessions are characterized by a decline in gross domestic product, but they often lead to job losses as companies cut workers to get through tough times. However, some workers are more likely than others to lose their jobs if and when a recession comes. Here’s who’s at risk.
According to some experts, these workers are more likely to lose jobs
Surprisingly, there is evidence that white-collar workers are most at risk of job loss in an upcoming recession, rather than blue-collar workers. In particular, the chief economist of the Milken Institute believes that low-skilled white-collar workers in certain industries could be the victims of layoffs.
“Covid has changed things,” Lee told CNN. “In this post-Covid environment, companies are restructuring. They’re changing the way they operate, they need to become more efficient. And what they’ve done is buy more software, deploy more technology, thinking, ‘I’ve got better educated people. need people to work for me.'”
Unfortunately, early evidence suggests that Lee may be right and that professional workers may lose more jobs in the coming months. In fact, the technology industry in particular has begun to let go of workers.
Meta, Facebook’s parent company, cut 11,000 jobs in November and Amazon has begun laying off 10,000 workers. Challenger, Gray & Christmas, an outplacement firm, also indicated that a total of 31,200 tech industry jobs would be cut in November alone.
This could be just the beginning of a trend that is accelerating as companies in the technology sector and beyond face tough choices about how to support their business and cut costs when an economic slowdown hits.
How to prepare for a possible recession
Whether you’re in an industry that’s likely to be hit hard by a recession or not, the sad reality is that more people become unemployed during economic downturns — and others see a drop in income due to fewer hours or a slowdown in promotions and raises.
It’s important to prepare for the very real possibility that your income will be cut or your salary will stop altogether. And there are a few key ways to do that, including:
- Save more money for emergencies in one high interest savings account so you have the money to pay the bills for several months if you lose your job and it takes time to find another one.
- Postponing big purchases. You may not want to commit to a big purchase only to regret spending the money later.
- Pay off debts. If you already have a big one emergency fund, paying extra on your debt can be helpful. If you can pay off a loan or credit card and eliminate that monthly payment, this could make it easier for you to cover your costs during a recession.
- Build your professional network. Don’t wait to lose a job to get your resume in order, keep track of your professional contacts, and join professional organizations that can help you form new relationships within the community.
Hopefully, by following these tips, even if the worst happens and you lose your job, you can protect yourself so that the layoff doesn’t have a long-term impact on your finances.
Warning: The highest cashback card we’ve seen now has 0% intro APR through 2024
Using the wrong credit or debit card can cost you a lot of money. Our expert likes this topperwith an intro APR of 0% through 2024, an insane cashback rate of up to 5%, and all somehow with no annual fee.
In fact, this card is so good that our expert even uses it personally. Click here to read our full review free and apply in just 2 minutes.