The economy is said to experience a recession or a downturn when it encounters two consecutive quarters of a falling gross domestic product (GDP). This can be brought about by various factors such as natural disasters, war, or even a global pandemic. It is often the case that during this time, many people find themselves without a stable income source. Nevertheless, the opportunities to create jobs during an economic downturn is very much possible and this can be realized through some of the means stated below in both the public and the private sectors.
Public Sector Job Creation
Spend on public works
Spending on public works such as building roads and bridges creates jobs because people are needed to work immediately. In this case, projects which are already approved need to be acted upon so that contractors or direct workers can be hired. This alone will already create a significant number of jobs during a recession.
Spend on unemployment benefits
When a government considers spending on unemployment benefits, then job creation is feasible. This is because funds intended for this cause will be released, allowing people to have the money to spend on their necessities such as groceries and clothing immediately. In response, manufacturers and retailers tend to hire more workers to be able to keep up with the demand.
Private Sector Job Creation
Reduce interest rates
If the interest rates of business loans are significantly reduced during an economic downturn, then small businesses will be able to use the money they have saved up in paying the interest of their loans to open up positions on their company to accept new workers. This is also the case if the mortgage payment interest rates are also reduced because it gives people a greater purchasing power that will drive businesses to thrive. With an increase in demand, businesses will need to hire more workers to keep up with their customers.
Cut down on small business taxes
Another way for the private sector to open up their businesses to accommodate new hires is by cutting down the business taxes that they have to settle. In this way, the money that they save up to pay for taxes can be used to pay the salary of a new hire, such that a local dispensary may consider hiring. In this case, getting an entry level position as a budtender will surely be possible. Other than getting new hires, a business can also use up the savings they get from tax payments to increase the wages of their current employees or even buy more supplies.
To wrap things up, there are numerous avenues where jobs can still be created during an economic downturn in both the public and the private sectors. In terms of the former, government spending on public works or unemployment benefits can spruce up job creation. On the other hand, reduced interest rates on the various loans acquired by private businesses, as well as a tax cut, can open up the avenue to create more jobs.
