Hurricane Ian has caused widespread damage across the East Coast, and local economists say that tens of thousands of people are likely to be left jobless as the storm’s impact continues to spread. Many workers in areas hit hardest by the hurricane have lost their homes or vehicles, making it all but impossible to report to work, while others simply don’t have access to reliable transportation amid widespread power outages and limited fuel supplies.
While many workers will likely find temporary employment as cleanup crews, Hurricane Ian may leave some long-term scars on the labor market, economists warn. Let’s find out more about the devastating impact of this natural catastrophe.
An Economic Crisis Looms!
When it comes to fixing or replacing damaged structures and equipment, large corporations have insurance, free cash flow, or the ability to issue debt on which to rely. However, workers are more likely to face a more challenging road back to financial stability.
The labor market in Florida was already very strained before the hurricane hit, but now businesses may feel increased pressure to replace lost employees with machines, self-service consumer features, or other incorporate advanced technology to eliminate the dependency on human employees. There is a growing number of families whose earnings aren’t keeping up with inflation, and for them, the loss of a source of income can quickly become a disaster.
Small Businesses Will Struggle
The decline in employment is caused by disruptions to businesses and the essential services they rely on (eg. power, water, and transportation networks). For a short time, Hurricane Ian will also dampen demand for commodities like high-priced goods and tourism.
Most coastal states like Florida rely heavily on tourism. To make matters worse, small enterprises and local family businesses, characterized by limited revenue and employment potential, will have a more difficult time making insurance claims and applying for financial help. As a result, many smaller firms can struggle to get up and running in the aftermath of the hurricane.
What Can be Done to Rebuild the Economy?
Employers and workers alike will benefit greatly from policies designed to ensure the survival of small businesses in the wake of hurricanes and other natural disasters. Many small companies in hurricane-prone locations must rely on weekly financial cash flows to stay afloat.
Due to the lengthy disruptions in essential services and the inability to conduct business, it becomes inevitable for these companies to close. In the aftermath of natural disasters like hurricanes, one way to help small businesses get back up and running is to make it simpler for them to secure recovery funds.
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