No matter where you live, a recession is the harsh reality of every economy and can have a profound effect on the employment landscape.
In the United States, a recession is defined as two consecutive quarters of negative economic growth as measured by the country's gross domestic product (GDP). While some jobs are more vulnerable to economic downturns than others, there are still steps you can take to protect your income and position yourself for success no matter what the future holds.
What is a recession?
A recession is a significant decline in economic activity spread across the economy, lasting more than a few months to a year. It is visible in industrial production, employment, real income, and wholesale-retail trade. The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country's gross domestic product also known as GDP.
In the United States, a recession begins when the economy experiences two consecutive quarters of negative economic growth, as measured by GDP. A recession is typically accompanied by a rise in unemployment and a decline in housing prices.
What causes recessions?
Recessions are usually caused by a combination of factors. Some recessions are triggered by a financial crisis, such as a stock market crash or a bank failure. Other recessions are caused by an increase in interest rates, oil prices, or other commodity prices. And still, other recessions are caused by a decrease in consumer spending or business investment.
It doesn't matter what causes a recession; the important thing to remember is that recessions are a natural part of the economic cycle. They are not necessarily bad for everyone; in fact, some businesses do well during a recession.
How do recessions affect different types of jobs?
Some jobs are more vulnerable to recessions than others. Jobs that are most vulnerable to recessions are typically those that are low-paying and require little education or training. These jobs are often in the retail and hospitality industries.
Other types of jobs are less vulnerable to recessions. Jobs that are less vulnerable to recessions include those that are high-paying and require a lot of education and training. These jobs are often in the healthcare, financial, and tech industries.
Jobs that are affected by recessions
The following are some examples of jobs that are typically affected by a recession:
1. Manufacturing: It makes sense that when people are spending less money, there is less demand for manufactured products. Recessions make people hesitant to buy big-ticket items, like cars and appliances, which can lead to layoffs in the manufacturing sector.
2. Retail: Like manufacturing, retail is also affected by consumer spending habits. When people are cutting back on their spending, they are less likely to buy items that are not essential, like clothing and electronics. This can lead to layoffs and store closings in the retail sector.
3. Construction: If there is no demand for new homes and commercial buildings, then there is not a need for as many construction workers. A recession can lead to a decrease in construction projects, which can lead to layoffs in the construction industry.
4. Technology: The technology sector is often affected by recessions because businesses are hesitant to invest in new technologies during an economic downturn. During recessions, people are more likely to save rather than spend. And this means that businesses are less likely to invest in new technologies, which can lead to layoffs in the tech sector.
5. Banking and finance: The banking and finance sector is often one of the hardest hit during a recession. This is because people are less likely to take out loans and invest in stocks during an economic downturn. The main focus during a recession is often on saving rather than spending. This can hit the finance industry very hard.
Jobs that are not affected by recessions
The following are some examples of jobs that are typically not affected by a recession:
1. Healthcare: The healthcare sector is considered recession-proof because people will always need medical care, regardless of the state of the economy. This makes doctors, nurses, and other healthcare professionals relatively safe from job loss during an economic downturn.
2. Foodservice: People have to eat, regardless of the state of the economy. That means jobs in food service and related industries are typically considered safe during a recession. This includes positions like servers, cooks, bartenders, and grocery store clerks.
3. Government: Government jobs are often considered recession-proof because they are supported by tax revenue, which is less likely to be impacted by an economic downturn than other sources of income. This makes positions like teachers, police officers, and firefighters relatively safe during a recession.
4. Utilities: Utilities are another sector that is considered recession-proof because people will always need electricity, water, and gas, regardless of the state of the economy. This makes jobs like electricians, plumbers, and energy workers relatively safe during a recession.
How to survive a recession
Although no job is completely safe during a recession, there are some things you can do to improve your chances of keeping your job or finding new employment if you do lose your job:
1. Invest in yourself: Investing in yourself doesn't mean buying an expensive new car or going on a luxurious vacation. Instead, it means taking steps to make yourself more marketable and employable. This can include things like getting additional training or certification in your field, learning new skills, or networking with people in your industry.
2. Create emergency funds: Layoffs are common during recessions so it's always better to be prepared. Creating an emergency fund can help you cover your expenses if you do lose your job. Try to save at least three to six months of living expenses so you know you can survive if you do experience a job loss.
3. Stay updated: Having a good idea of what's going on in your industry can help you weather a recession. Stay up-to-date on industry news and trends so you know what's happening and can make informed decisions about your career. Whether it's recruitment or a layoff, being informed is the key to making the best choices for your career.
4. Network: Developing a strong network of professional contacts can help you weather a recession. When jobs are scarce, it's often who you know rather than what you know that gets you hired. So get out there and start meeting people in your industry. Attend industry events, join professional organizations, or just reach out to people you know.
5. Be flexible: Being open to new opportunities can help you survive a recession. If you're unemployed, consider taking a job that's outside of your usual field. While it may not be your dream job, it can help you pay the bills and keep your skills sharp until the economy improves.
There is no such thing as a recession-proof job, but there are ways to improve your chances of keeping your job or finding new employment if you do lose your job. No one knows when the next recession will hit, but it's better to get prepared now so you're ready for whatever comes your way.