Coronavirus: Measuring the Impact on Hiring and Production
Updated: Mar 18
As the coronavirus disease or COVID-19 continues to cause panic, the impact can be felt in the U.S. job market. Most of all the coronavirus has had a devastating impact on the global supply chain by locking down China, one of the world’s largest economies. This lockdown has caused factories to close, transportation and ports to close, making it difficult for products to be produced and delivered. Employees at the center of the outbreak are asked not to show up, choosing not to show up or waiting to be medically cleared before returning to work. Global companies like Facebook are introducing travel suspensions as employee work-from-home quarantines to combat the spread.
It has not only affected products waiting to be exported, but multinational companies are beginning to see an impact on their sales within the Chinese market. Some of the biggest retailers have closed stores or are postponing store opening in China to avoid the uncertainty of the market. As time goes on, the global impact that the coronavirus has made may get worse before it can get better.
Even with the reopening of some Chinese factories, the odds are not in anyone’s favor. Factories are beginning to run low on raw materials they depend on from other industries. Isaac Larian, CEO of MGA Entertainment, reported that Little Tikes factory in Ohio has maybe enough raw materials from their Chinese counterpart to last them another month. This shortage is leaving many feeling uncertain about what is to happen next. It can be reflected in the current stock plunges taking place in the U.S market.
“Every day is crucial and, really, the next two weeks are going to show whether we can turn things around or not this year,” Larian told The Washington Post. “The timing couldn’t be worse. In 41 years in the toy business, this is the worst disaster I’ve seen.”
Some companies in the U.S. are starting to see the end of the chaos because of the reopening of some factories. It cannot be relied on because the labor force just is not present in China now. Many factory workers don’t want to or cannot return to work. As described in NPR’s article by an unidentified person, “one production line used to have 4,000 people. Now there are about a dozen.” A factory cannot produce the necessary production goals with a fraction of the workers needed. This is causing many factories to overwork their crews with overtime. Due to the closure of many factories and the small workforce currently available in China. The open factories are experiencing delays from a month to six weeks at the moment. The delays are costing all parties involved. The coronavirus is expected to have a larger impact on the global economy than many initially realized.
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