Impacts of Coronavirus on Workplaces Photo: CIO

10 Steps to take if you lose your job during Coronavirus pandemic

Isola Moses | ConsumerConnect

What should you do if you lose your current job? The fact is several millions of employees already are out of work while private businesses are closing, and economic activities are coming to a near grinding halt in several economies in the world.

Report indicates that in recent times, the novel Coronavirus (COVID-19) has destabilised the job market in the United States (US), reversing its reign as the best in decades to now the worst.

For instance, more than 17 million people were reported to have applied for unemployment insurance since March 2020.

This implies that joblessness has risen to nearly 14 percent, higher than at any time during the Great Recession, according to bankrate.com.

The US Treasury Department said unemployment could skyrocket to 20 percent, while economists at the St. Louis Federal Reserve said joblessness could top 32 percent — above where it was during the Great Depression.

“It is quite clear that we’re facing a toll of furloughs and job cuts, which are unprecedented in recent American history. We are bracing for ugly numbers,” says Mark Hamrick, Bankrate’s Senior Economic Analyst and Washington Bureau Chief.

And as it applies to a considerable number of other African economies, the COVID-19 pandemic, for example, has wreaked havoc on Nigeria, Africa’s biggest economy.

Early May 2020, reports stated that following the disruptions in the business environment caused by the Coronavirus pandemic and the lockdown imposed by the government to contain its spread, business associations and employers in the country had asked for stimulus packages to help in minimising the shocks and reducing the degree of job losses, which in turn negatively impacts consumer demand in the economy.

It is recalled that the Nigerian Association of Chamber of Commerce, Industry, Mines and Agriculture (NACCIMA), Nigeria Employers’ Consultative Association (NECA), Lagos Chamber of Commerce and Industry (LCCI) and some state chapters of the Manufacturers Association of Nigeria (MAN) have sought grant from the Federal Government to pay workers’ salaries, other stimulus as tax relief and concessions, and moratorium on loan payments among others.

Ambassador Ayo Olukanni, Director-General, NACCIMA, said: “We are also in support of the call for tax deferment, moratorium on loan payments among others to help keep private sectors from going under completely.

“But to prevent and discourage sacking of workers, consideration should also be given to what has been described as Pay-Check Protection Programme and Job Security Programme for the private sector.”

Of the situation in the private sector, Dr. Muda Yusuf, Director-General of LCCI, hinted that retaining the pre-Coronavirus workforce would be very difficult for most businesses, adding that the current shocks to businesses are severe and devastating.

So, if you’ve have faced job loss because of the Coronavirus or if it happens you lose your job, here are 10 steps you may consider taking to help lessen the financial blow and prepare you to bounce back once the economy recovers.

  1. Apply for unemployment benefits

If you are out of work, one of your first steps should be filing for unemployment benefits if available in your economy.

And even if you haven’t completely lost your job, but have seen your hours significantly reduced, you can still qualify in some economies.

  1. If you have emergency savings, now’s the time to use it

There’s a tried-and-true piece of financial wisdom: Individuals should maintain a cushion of three to six months’ worth of expenses — that way, if they face an unexpected cost or emergency, they’ll be better equipped to weather it without having to borrow money.

If you’re fortunate enough to be in a financial situation that allows for one, now is the time to utilise it and put it toward any bills you have forthcoming.

  1. Look over your monthly expenses and find ways to cut back on ‘wants’

After tapping into your emergency savings, your next step should be looking over your monthly expenses and finding ways to cut back.

You’ll have to keep paying nondiscretionary bills such as rent, utilities and groceries, but other added expenses that aren’t crucial to you or your family’s survival — from online subscriptions to meals and entertainment away from home — might have to take a breather during a spell of unemployment.

  1. If you have a mortgage, inform your lender and servicer

If you’re worried about making your monthly mortgage payments, you’re not alone. For instance, in the US, many states and the Federal Government have rolled out programmes to help homeowners who may be experiencing financial distress during the outbreak.

For renters, the situation is trickier. Communicate with your landlord or landlady about your specific financial situation to avoid eviction or reach out to local organisations for help.

  1. Get in touch with your bank

Banks across the country are also taking steps to help mitigate the financial impact from the virus.

From waiving fees and minimum balance requirements to letting individuals withdraw their certificates of deposit (CDs) early without penalty, this may help free up extra cash.

If you do need to borrow money, your bank can likely work out an option for you to take out a small-installment loan with a flexible and low-interest payment plan.

But be sure to still compare your options. O’Neill recommends utilising the “rule of three.” Look at what three different banks are offering.

One could be your local community bank, another could be a commercial bank and a third could be a credit union. Even online banks may have some good, reliable options.

“It’s always a good idea to just find out what they have available,” she says.

  1. Stay away from payday loans

But if you need to borrow money, be sure to steer clear of payday loans. Those typically come with high interest rates — sometimes of 300 or 400 percent, O-Neill says. Even if you take out a small loan to cover a two-week period, it may still be incredibly hard to pay back. A personal loan is a better option if you need additional cash.

  1. Communicate with your utility and service providers

If you’re unable to pay your utility bills, you might not have to worry. Many companies are creating their own leniency policies, with some electricity providers saying they won’t shut off lines if a customer misses a payment.

This also includes Internet and payTV service providers. As always, it’s better to inform the utility or Internet service provider you work with about any financial hardship before skipping a payment.

  1. You can use your retirement accounts’ withdrawal — but avoid it if possible

Many retirement accounts offer individuals what’s called a “hardship withdrawal,” where individuals under financial distress can tap into their accounts for immediate cash.

But while it’s always an option, experts say it should be a last resort. It sets back your retirement savings significantly, while also leaving you susceptible to piling penalties and fees if you aren’t careful.

  1. Take advantage of community programmes

While much of the news coverage surrounding the Coronavirus outbreak has been focused on a Federal level, many private organisations in your community could also be offering assistance — from food banks to charity organisations. Stay informed with what’s going on in your community.

  1. Be flexible about new opportunities

Workers may also want to find ways to broaden their skill sets, whether that’s by taking on new training or learning something new. All of this could set them up for success once the outbreak does subside.

Bottom line

Think of your response to job loss as a twofold call to action: One is about addressing your expenses, and the other is about ensuring you still have an income.

Broadly speaking, make a list of what you purchase and pay for each month. This can help you identify ways to cut back, as well as loan servicers or credit card companies (if available) that you can reach out to during your time of unemployment — a period understandably wrought with unknowns.

“These are the financial costs of the pandemic hitting individuals’ well-being and lives. We know that the contraction will be deep and immediate.

It is impossible to know whether the economy snaps back fairly quickly or suffers a longer lasting downturn,” says a personal finance expert.

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