What’s interesting is the wage gap. Many (most) of the shut off jobs are the lower paying ones. Waiters and factory workers. Obviously some weird exceptions (pro athletes).
Many of our nations higher paying jobs are either essential (doctors, nurses), or remote friendly (developers , to some extent lawyers and real estate agents).
Even if 25% of our economy is not working, we can make near 90% of our GDP.
Which isn’t ideal but it makes the lockdown perhaps less dire than it appears for the economy.
It may be true for few weeks or so, but if this continues the fallout will be widespread. Lower wage jobs is the bedrock of the whole economy. How much lawyering can you do if you have to take care of your own food prep, childcare, or - simply put - your clients start disappearing one by one because they cannot pay? How much longer you can continue to pay to the banking staff if mortgages and business loans default like house of cards? How much longer can you pay to programmers at Facebook when advertisers like restaurants, spas, hotels are not paying for advertising?...
Advertising is an incredibly recession resistant industry.
Especially for FB and Goog, as they use second-price auctions, so anyone who measures their results will see performance improvement, make more money and thus (theoretically) invest more in advertising until it is no longer profitable.
They'll lose some revenue, but it won't be anything ridiculously large; and even if it is, some of the previously priced out advertisers (less profitable mobile games, for instance) will return.
Advertising is a hell of a business, especially online.
Google stock has fallen significantly since its highs. So has FB. MSFT has been doing well because of cloud and Teams.
Airlines are heavy advertisers and their industry is crushed. We’ll see the next quarterly results. I bet at-least 30% revenue quarterly loss compared to last year.
The economy is very intertwined. Especially when people start defaulting on mortgages en-masse. The 2 trillion stimulation hasn’t yet started sending out cheques to those who need it. Banks haven’t figured out how to loan to businesses that need it.
The worst death count / day of virus is still to come.
People can may be weather one or two months, after that. Shit will really hit the fan.
Stock prices are mostly bullshit. US equities (particularly growth stocks) have been massively over-valued for years, because of low interest rates and QE.
Nontheless,they have a good business model and will most likely be fine (even if they show no revenue growth, they make a lot of money).
If you're suggesting 30% revenue loss relative to last year, that's probably flat to -10% revenue for each of them, which in the midst of a global pandemic is pretty good.
Like, things are going to be really bad for a whole lot of people, on that we agree.
However, i continue to believe that Goog and FB's businesses will weather the storm a lot better than most other technology companies.
For the short to medium term, a high % of their wage is replaced with unemployment benefits. This was also extended a bit by federal money, right? So it’s not like 25% of the population drops to 0 income.
Edit - your math is also counting babies and kids. Not many babies or kids lost jobs in the past month.
Population of working age (15-64)[0]: ~206M
206M * 25% = 51.5M
That's still a whole lot of people left with their hands out that you seem to be dismissing quite easily. To me, this is the danger of statistics. The numbers loose all meaning. These are fellow human beings. This isn't war where the generals accept a certain percentage of losses of volunteering soldiers. These are normal people that through no fault of their own now have not job and source of income.
The babies and kids are relying on working adults to feed them. They may not count in the jobless statistic, but they certainly are affected by the unemployment situation.
The $600 boost was calculated because it takes the average recipient to full pay, so, yeah it's a high percentage. For high wage workers it's a smaller percentage, both because before the boost there is a benefit cap in most state formulas and because the $600 boost represents a smaller additional percentage, but most workers aren't high-wage workers.
It's not just low wage workers, it's an incredible amount of small business owners as well. We've been shut down for about three weeks and a significant percentage of restaurants in my area are not even providing take-out anymore.
> remote friendly (developers
The layoffs in software engineer world are still yet to come and we've already seen quite a few. Sure, not nearly as many layoffs as low-wage workers, but you've seen the layoff threads here on HN, right?
This is only the start of the downturn if the US stays shut down.
I think there's a plausible case to be made that there exists a 75% slice of our jobs that could produce 90% of our GDP. I'm a lot less confident that we can construct such a slice, and almost completely sure that government planners trying to reify the term "essential business" won't construct it.
I'm sure that fact will be comforting to the millions of people getting evicted and going hungry on the streets which will happen the day evictions are allowed again, which in many places is today. $1200 isn't going to go far for most people, certainly not more than a month. Unemployment might help for those that can collect it. But let's not mistake gdp for a well functioning economy. If half of the nation ends up homeless and on the streets, it'll be irrelevant if we're making 99% of the gdp. This applies to normal times too. Pretending like this figure is a reflection of how well the economy is doing is absurd. In current times, it's even more absurd to pretend that just because we're making 90% of our gdp that things are going well or are less dire than they appear. What nonsense.
Many of our nations higher paying jobs are either essential (doctors, nurses), or remote friendly (developers , to some extent lawyers and real estate agents).
Even if 25% of our economy is not working, we can make near 90% of our GDP.
Which isn’t ideal but it makes the lockdown perhaps less dire than it appears for the economy.