Coronavirus caused income loss for nearly half of American households

 

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Chief Economist on U.S. recovery and how we’re ‘standing at the bottom of the canyon’

 She had been working as a concierge services coordinator at a nonprofit performing arts organization in New York City for four years before the closure of entertainment venues across the city destroyed demand for her skills.

“Job hunting is already incredibly tough without a global pandemic,” she told Yahoo Money.

The coronavirus pandemic and response have left millions of Americans like Laura without a job and caused employment income loss for nearly half of the households across the country, according to research from the Household Pulse Survey by the U.S. Census Bureau.

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The rich have stopped spending and that has tanked the economy

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A worker paints over a Louis Vuitton storefront, boarded up after the coronavirus outbreak, on March 30 in San Francisco.

The wealthiest American households are keeping a tight grip on their purse strings even as their lower-income counterparts are spending a lot more freely when they emerge from weeks of lockdown. That decline in spending by the wealthy could limit the whole country’s economic recovery.

Researchers based at Harvard have been tracking spending patterns using credit card data. They found that people at the bottom of the income ladder are now spending nearly as much as they did before the coronavirus pandemic.

“When the stimulus checks went out, you see that spending by lower-income households went up a lot,” said Nathan Hendren, a Harvard economist and co-founder of the Opportunity Insights research team.

However, the wealthy are not matching them. “For higher-income individuals, that spending is still way far off from where it was prior to COVID and it has not recovered as much,” Hendren said.

That’s potentially crippling because consumer spending is a huge driver of economic activity. In fact, so much of the country’s economy depends on shopping by the top income bracket that the wealthiest 25% of Americans account for fully two-thirds of the total decline in spending since January.

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Say goodbye to six-figure starting salaries – with these exceptions

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KEY POINTS

  • Starting salaries for newly minted college graduates are lower almost across the board as a result of the economic fallout from Covid-19.
  • However, some entry-level positions in tech still pay near six figures, according to new data from Glassdoor.
  • Some entry-level job offers and internship opportunities are being rescinded, another survey found.

Those armed with a newly minted college diploma are entering the worst U.S. job market in modern history, with unemployment spiking to levels not seen since the Great Depression.

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Almost half of Universities may be gone in 5 to 10 years, professor admits

 

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Scott Galloway, lecturer in Marketing at New York University, speaking at the DLD (Digital-Life-Design) conference in Munich, Germany, 18 January 2016.

An NYU professor of business surmises that because of the effects of the coronavirus, anywhere from one-quarter to almost one-half of universities in the nation may go out of business in the next five to ten years. NYU professor Scott Galloway also admitted that foreign students paying full tuition are the “cash cow” for universities and “might decide not to show up.” He commented, “What department stores were to retail, tier-two higher tuition universities are about to become to education and that is they are soon going to become the walking dead.”

Speaking with Hari Sreenivasanon on PBS’ “Amanpour and Co.,” Galloway spoke of the impact of the coronavirus on colleges and universities, forcing them to hold their classes over the internet, and how that may catalyze flight from the universities and the universities’ subsequent downfall. Galloway stated, “Students I think across America along with their families listening in on these Zoom classes are all beginning to wonder what kind of value, or lack thereof, they’re getting for their tuition dollars … There’s generally a recognition or disappointment across America, and I would argue that it’s not that they’re disappointed in the Zoom classes, it’s more the recognition that Zoom has uncovered how disappointing college education is. I think there’s a lot of households saying, ‘This is what we’re paying for?’”

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The looming bank collapse

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The U.S. financial system could be on the cusp of calamity. This time, we might not be able to save it.

 After months of living with the coronavirus pandemic, American citizens are well aware of the toll it has taken on the economy: broken supply chains, record unemployment, failing small businesses. All of these factors are serious and could mire the United States in a deep, prolonged recession. But there’s another threat to the economy, too. It lurks on the balance sheets of the big banks, and it could be cataclysmic. Imagine if, in addition to all the uncertainty surrounding the pandemic, you woke up one morning to find that the financial sector had collapsed.

You may think that such a crisis is unlikely, with memories of the 2008 crash still so fresh. But banks learned few lessons from that calamity, and new laws intended to keep them from taking on too much risk have failed to do so. As a result, we could be on the precipice of another crash, one different from 2008 less in kind than in degree. This one could be worse.

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San Francisco rents plunge as tech employees abandon high-priced city to work remotely

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Twitter, Facebook among companies that will allow employees to work remotely moving forward

 Coronavirus causes ‘big movement’ out of New York City: Moving company president

Roadway Moving President Ross Sapir says more people are leaving New York City for nearby states or southern states, like Florida and Texas.

Coronavirus-related work-from-home policies at the country’s biggest technology companies appear to have caused an exodus from Silicon Valley, which has sent rent prices in San Francisco plummeting.

Rents for a one-bedroom apartment in the major metro area were down 9.2 percent in June when compared with the same period last year, according to data from rental site Zumper. That is the largest decline since at least 2015 and brings the price point ($3,360) down to where it was three years ago.

In the U.S. overall, one-bedroom rents fell by just 0.2 percent. No other major metro city’s data came close to the decrease in San Francisco.

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There is a housing market crisis brewing – And here’s where it will strike first

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A potential housing crisis is brewing in some dense, overpriced housing markets as new work trends come into play.

Recent data on housing shows that sales remain strong, with only a small drop in prices.

However, longer-term trends are likely to lead to significant drops in today’s high-priced markets.

The shift towards a remote workforce will correct housing imbalances in markets that otherwise may have gone unsolved.

Many have feared a repeat of the 2008 housing crisis this year as the economy shut down. So far, however, signs indicate that the overall market is holding up well.

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Why ‘as-a-service’ models will reign in a post-pandemic world

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It’s hard to think ahead when we are up to our necks in the misery and fear of a pandemic, but every CEO should be focused not just on how to survive, but how to thrive in the COVID-era. I say era because this is not a passing phase, but a new reality.

COVID is accelerating many societal and technology shifts and reversing others. The COVID-era is a technology-driven era with widespread and often forced adoption of trends like work-from-home, online retail, pickup/delivery services, entertainment-as-a-service, telemedicine (well, tele-you-name-it), and machine-learning. Embodied in this change are deep behavioral shifts that, even given a decade, might never have reached these proportions. Enabling nearly all of these shifts is an “… as-a-service (XaaS)” capability be it data, infrastructure, platform, software, or experience. XaaS was already on it’s way to becoming a juggernaut, with a market value of $93.8 billion in 2018 and projected to triple to $344.3 billion by 2024, but it’s now on a whole new COVID-triggered upswing.

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Loaded with cash, global property buyers wait for sellers to crack under pandemic strain

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  • Private equity firms have US$328 billion cash to deploy for global real estate investment, according to Preqin data
  • Sellers are only willing to offer discounts of 5 per cent while buyers are hoping for about 20 per cent concession

The world’s biggest real estate investors are sitting on piles of cash, preparing for once-in-a-lifetime opportunities created by the pandemic.

With economies around the world sputtering, commercial real estate prices are expected to come down. How much they will fall is the key question.

Sellers are currently willing to concede discounts of around 5 per cent, while bidders are hoping for about 20 per cent off pre-pandemic prices, said Charles Hewlett, managing director at Rclco Real Estate Advisors. That estimated gap, which is likely wider in specific cases, has put a freeze on deals.

“The mantra for anything that has not got started is: delay, defer and, in many cases, renegotiate,” Hewlett said. “If I’m going to have vintage May 2020 on my books, I want to be able to demonstrate to my investors that I got an exceptionally good deal.”

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The COVID-19 shutdown will cost Americans millions of years of life

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Our governmental COVID-19 mitigation policy of broad societal lockdown focuses on containing the spread of the disease at all costs, instead of “flattening the curve” and preventing hospital overcrowding. Although well-intentioned, the lockdown was imposed without consideration of its consequences beyond those directly from the pandemic.

The policies have created the greatest global economic disruption in history, with trillions of dollars of lost economic output. These financial losses have been falsely portrayed as purely economic. To the contrary, using numerous National Institutes of Health Public Access publications, Centers for Disease Control and Prevention (CDC) and Bureau of Labor Statistics data, and various actuarial tables, we calculate that these policies will cause devastating non-economic consequences that will total millions of accumulated years of life lost in the United States, far beyond what the virus itself has caused.

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The results are in for the sharing economy. They are ugly

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An Uber ride in Brooklyn last month. The ride-hailing company’s business collapsed in March as shelter-in-place orders spread through Europe and the United States.

 Lyft, Uber and Airbnb depend on travel, vacations and gatherings. That’s a problem when much of the world is staying home.

OAKLAND, Calif. — The coronavirus pandemic has gutted the so-called sharing economy. Its most valuable companies, which started the year by promising that they would soon become profitable, now say consumer demand has all but vanished.

It is not likely to return anytime soon.

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Community colleges could see a surge in popularity amid Covid-19

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Historically, community college enrollment spikes during economic downturns.

This year, a public health crisis may draw even more students who don’t want to travel or live in a dorm.

The coronavirus crisis has already changed the way this year’s crop of high school seniors are thinking about higher education.

And community colleges across the country are preparing accordingly.

“Under the circumstances, families may turn to us as the gateway of opportunity, and we’ve been ready,” said Michael Baston, the president of Rockland Community College in Rockland County, New York.

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