The coronavirus crisis gripping the world has created at least one (positive) unintended effect: near-full employment for cleaning services and janitors.
According to job service ZipRecruiter listings for cleaners, cleaning companies and janitors have skyrocketed 75% year-over-year on the site — underscoring increased demand for those services, even as the virus threatens employment in other industries.
In an interview with Yahoo Finance, Julia Pollack, ZipRecruiter’s labor economist, said cleaning positions are on the rise in places like hotels, office buildings and universities as those institutions are literally forced to clean up their act. All have moved to strengthen their policies as the outbreak worsened, and rising numbers of employees and students vacate facilities.
Although cleaners “earn very little, so not being able to get scheduled enough hours means they can’t cover the bills,” Pollack said, many will now reap lots of overtime.
Meanwhile, companies have been encouraging or mandating work-from-home policies, limiting work travel as conferences are postponed, scaled back or canceled altogether. According to Pollack, the upside is lower costs for companies who don’t have to shell out as much to keep employees comfortable.
“Offices are a huge cost for companies. Increasingly it’s a better judge of whether an employee is working or not if they are logged into Slack than if they are at the desk,” she said.
However, the benefit of that effect is only seen in industries where work from home is possible. In a recent survey, Ziprecruiter found more than 50% of workers said they can’t work from home when sick — particularly in lower-wage service, mining, energy and construction jobs.
Several of those sectors have already been under pressure, and the COVID-19 crisis will exacerbate that.
“Because of the downturn in global demand for energy, prices are coming down so it no longer makes sense for companies to drill shale oil and produce as much natural gas,” she said.
‘Job losses can be much deeper’
Some companies that were bracing for a trade war — by over-buying products to avoid a tariff increase — are better positioned to get now sitting on a mountain of inventory, according to Pollack. Some of those brands include Walmart (WMT), Steve Madden (SHOO) and Harley Davidson (HOG).
It can help them avoid some of the supply chain disruptions stemming from China’s near-complete shutdown.
“Ironically, the steps they took to avoid trade war pains and prepare for the worst” means they are now better prepared, the economist said.
So what sort of impact will March’s jobs report show from the coronavirus? The blockbuster February jobs report, which showed the U.S. added around 273,000 jobs during the month.
However, it didn’t capture the effects of an outbreak that’s sent America’s infections surging, and forcing mass closures of events, businesses and schools.
“We’ve been adding 200,000 jobs per month for 13 months in a row, on average,” Pollack said. “Yet, we know, from previous recessions that when that changes, and when companies start laying off…job losses can be much deeper and much more rapid.”
Meanwhile, anecdotal rises in layoffs suggest the real pain will be reflected when March’s data begins to roll in next month.
And the boom in janitor jobs is unlikely to offset the virus’ impact on other industries roiled by the outbreak, and will likely experience soaring layoffs as businesses are forced to contend with the expected drop in demand.
That includes all things tourism, specifically in vacation hot spots like Florida, Hawaii and Nevada, as well as business travel and its effect on hotels and airlines. Since the outbreak forced governments to impose stiff travel restrictions starting in January, the travel and leisure industry had been pummeled by plunging stock prices and fewer clients.
While the Trump administration is working out other ways to help curb the impact, including a payroll tax holiday until the end of the year — the demand drag is all but certain to intensify as states and localities clamp down on large crowds and public gatherings.
With increasing frequency, businesses have downgraded their outlooks for the year, and warned of hits to revenue because of the coronavirus panic. While layoffs that are a direct result from the outbreak remain low, that may change, Pollack said.
One bright spot is the public sector jobs from the government to help with the Census until July, and the surge from that event may offset some lost jobs.