The economic impact of COVID-19 is broad and unsettling. Before COVID-19, the number of Americans out of work hovered between 5.7 million and 5.8 million (opens in new tab) on average. The latest reported number (opens in new tab) is about 16.3 million. The impact on individual states (opens in new tab) varies widely, with four states reporting unemployment rates of 15% or higher. Many of the jobs lost during the first quarter of 2020 may never return.
The plight of part-time workers illustrates how businesses are reacting to the changing environment. Part-time workers (opens in new tab) have historically numbered between 22 million and 28 million since 1990. That number dropped significantly in April to about 19 million but has since climbed back to around 23 million. However, these gains are likely to simply disappear in the coming months as states again close or consumers again avoid theaters, hotels, bars, restaurants and stores.
You may be among the droves of part-time workers without benefits who have helped drive down the unemployment rate by finding work in states that were reopening. However, the states doing most of the hiring last month are also those with spiking COVID-19 infections — meaning they are the most vulnerable to shutdowns going forward.
So, now that the coronavirus is decimating consumer confidence (opens in new tab), what can you do to survive in an economy that was already embracing the use of a temporary and chronically underemployed workforce as a business practice? You can follow the practices businesses have turned to in order to survive during this recession:
- Reducing expenses.
- Seeking alternative sources of revenue.
Awhile back, I created a list of ways to cut expenses, and it’s especially relevant today. Here are five ways to help take control of your future in this strange new economy.
1. Never shop as entertainment.
Consumer spending through online shopping has fueled tremendous profits for companies like Amazon (opens in new tab), which enjoys 38% of all U.S. retail e-commerce sales. The next five top retailers — Walmart, eBay, Apple, The Home Depot and Wayfair — share just 17% of such sales. Spending your browsing time on these websites, especially with the rise of one-click purchasing, can lead to impulse spending and over-shopping, such as buying items in bulk to avoid delivery fees without any significant discount.
Buy only the amount you really need and avoid buying premium brands at full price when cheaper or sale brands will do. If you find something you really need, rather than buying it on that website, search that exact product in your browser to compare prices from the manufacturer and competing e-commerce sites. You will be surprised by how much the price can vary.
2. Stay away from the latest and greatest mobile devices.
The costs for mobile phones, wireless access, cable TV and on-demand and subscription streaming services have ballooned. Top-rated phones are retailing for up to $1,100, which many subscribers fund by purchasing the phones on installment or simply leasing them. This kind of subscription binds you to that wireless plan and encourages constant tech upgrades.
I recently replaced my mobile with an unlocked phone after six years with the same model, and only because the wireless service began throttling my internet speed and the phone manufacturer ceased all support and upgrades. There are plenty of lower-cost mobile phones and wireless plans to choose from if you are willing to give up some bells and whistles.
3. Reconsider your online entertainment needs.
Forbes has reported that Over-the-Top (OTT) subscribers spend $100 a month on average to stream songs, sports, TV series and movies. OTT is shorthand for on-demand purchases to access content without a subscription or that are in addition to a monthly subscription fee. Some good music streaming services are free, and plenty of shows, series and movie services that are strictly OTT have no monthly fee.
So, think about the entertainment you really need, limit your OTT, and eliminate the services you can do without. And dust off that DVD player. You probably own dozens of movies on DVD, Blu-ray and even VHS, and your local library likely has several hundred titles that you can check out for free.
4. Look for savings in your medical care and prescriptions.
Coronavirus restrictions on in-person medical services have forever altered the medical office experience. There is a growing interest in teleservice screenings and online medical advice to reduce wait times, increase access to well care and reduce insurance costs. Many practitioners are now limiting office visits to necessary testing and procedures and are finding that this model improves service delivery and reduces cross-patient contagion. Consumers are also self-regulating their use of medical services and turning to over-the-counter choices and home remedies to control their costs. Pharmacies and clinics located in grocery stores are providing a low-cost alternative for vaccinations and testing, too.
Prescription services, like GoodRx, are finding real competition from large-scale pharmacies now offering subscription services with special discounts on commonly prescribed generic drugs. It is essential that you train yourself to always compare drug prices across several of these services and take the time at the pharmacy counter to obtain the best price for each prescription every time you refill them. Prescription prices vary wildly from day to day and from service to service.
5. Find alternative sources of revenue.
It is well documented that part-time and underemployed workers are often juggling positions at two or more employers. Consider your current skill set, your access and tolerance for seeking additional or unrelated training and education, and your ability to apply yourself to deliver services directly to consumers. The fastest-growing (opens in new tab) areas of self-employment are in home repair, maintenance, renovation, landscaping, decorating and cleaning services.
For some time, homeowners have been experiencing the difficulty in finding someone who will take on small home repair and improvement jobs. The number of tradespersons in carpentry, drywall, tile, plumbing installation, stone masonry, fencing, wiring and painting are aging into retirement, just like most of our society. There is also a growing need for people to do housecleaning, landscaping, trimming and mowing, house-sitting and pet-sitting, lawn tractor and mower repairs, and other small jobs.
If you want to control your future or just have a skill set to fall back on, seek training in these necessary and oft-ignored professions.
Timothy Barrett is a senior vice president and trust counsel with Argent Trust Company (opens in new tab). Timothy is a graduate of the Louis D. Brandeis School of Law, 2016 Bingham Fellow, a board member of the Metro Louisville Estate Planning Council, and is a member of the Louisville, Kentucky and Indiana Bar Associations, and the University of Kentucky Estate Planning Institute Program Planning Committee.