The global unemployment rate is skyrocketing in the aftermath of businesses shutting down due to the Coronavirus pandemic. Public health measures to slow the spread of the virus across the globe are restricting the movement of people, freezing trade and commerce, factory closures, and disrupting global supply chains.
The global economy will go through its steepest contraction this year. So far, the outbreak has infected over 4 million people worldwide and claimed more than 280,000 lives, according to Johns Hopkins University. The International Monetary Fund (IMF) has said that such an economic crisis has not happened since the Great Depression. The IMF's latest forecast shows the world economy at a 3% contraction.
The International Labour Organization (ILO), an agency of the United Nations estimated that nearly 200 million people could end up losing their work. ILO's initial projection was 25 million people but the latest assessment points to higher unemployment figures: four out of five workforces will get impacted by the pandemic.
During the second quarter of 2020, the outbreak could wipe out 6.7% of working hours all around the globe which is an equivalent of 195 million full-time employees out of work. ILO's Director-General Guy Ryder said that implementing the correct and urgent measures will make the difference between survival and death. He also said that the current situation is more than a global health crisis, but a major labor market and economic crisis impacting people's lives tremendously.
Non-Resident Indians (NRIs) and Coronavirus Pandemic
There are a total of 17.5 million Indian migrants living all over the world as per the United Nations data reported in 2019. Non-Resident Indians are people of Indian origin who hold an Indian passport but are living outside India for employment or businesses for an uncertain period of time.
According to the Union Ministry of External Affairs (MEA), nearly 2 million NRIs live in 10 countries that have the highest number of COVID-19 cases.
H-1B Visa Suspension amid Coronavirus Outbreak
With rising unemployment rates following the coronavirus outbreak, US Tech Workers that advocate for local hiring have urged the US President to suspend the H-1B visa program.
H-1B visa is a program that allows foreign workers to get hired by US companies to work in high-skilled professions requiring theoretical or technical expertise. Most of these workers hired by the technology companies are from countries like India and China. Employment opportunities, higher wages, better lives, and career advancement are some of the main reasons why many educated, highly skilled Indians go abroad to countries such as the US, UK, Canada & Germany.
The majority of Indian technology professionals working in the US are on the H-1B visa program. Thousands of immigrants have already suffered job loss due to the massive layoffs. More H-1B workers could lose their jobs due to the recession. Those on H-1B are not eligible for unemployment benefits.
An H-1B visa holder has to leave the US within 60 days of losing their job as per the current federal rules. Workers on H-1B visas started a petition campaign on the White House website to extend the post-job loss limit to stay from the existing 60 days grace period to 180 days.
President Trump signed an Executive Order to suspend immigration to protect American jobs in April, 2020 amid the Coronavirus pandemic. The good news is that the new Executive Order does not apply to H-1B workers.
NRIs stranded in India due to the lockdown
Due to the ban on international travel, many NRIs are stuck in India with the fear of losing their jobs and visas in the US. Many carry a huge student loan burden for their education in the US and are the sole earners of the family.
They have appealed to prime Minister Narendra Modia's government to arrange for outgoing flights to the US to save their livelihood.
In light of the suspension of international air travels, the Ministry of finance has announced relief on counted days for residential status for tax purposes.
The job markets for expats are not likely to improve till we see improvement in global economic conditions. Historical data shows that businesses are more likely to fire foreign workers before native-born workers.
Taking the example of the 2008 financial crisis, the average unemployment rate for foreign workers in the European Union (EU) jumped from 11.1% to 16.4%, significantly higher than that for native Europeans.
Impact of Coronavirus on NRI Remittances
The World Bank predicts a 20% decline in global remittances and 22% drop in remittances to South Asian countries due to the coronavirus pandemic. Remittances tend to be counter-cyclical during other crises, as we have seen during the Kerala floods. Coronavirus is a global pandemic not limited to a state or country.
The job loss and economic uncertainty due to the coronavirus outbreak will be hard on the Indians living abroad and likely to send far less money back to India. As a result, the remittances are projected to fall by 23% to $64 billion this year.
India is the top receiver of remittances for years in a row but the global slowdown and travel restrictions are likely to affect the remittances inflow even in 2021. $83 billion was received in 2019 having a growth rate of 5.5% based on a World Bank report.
Their foreign remittances deposited in Indian bank accounts like the Non-Resident Ordinary Rupee Account (NRO) or the Non-Resident Rupee Account (NRE) in rupee denomination will be significantly reduced. This will impact the Indian economy as remittances to India helps in maintaining the national foreign reserves and drive consumption on micro-levels.
Worst hit sectors of the economy
Different sectors of the economy have different degrees of impact by the sudden shut down of businesses. Due to the emphasis put on travel restrictions and social distancing, accommodation, and food service industries (144 million workers) are among the worst hits. Other businesses like manufacturing (463 million), retail and wholesale (482 million), business services, and administration (157 million) have also been impacted severely. Together, they account for 37.5 % of the global workforce, with 1.25 billion people engaged in these industries all over the world.
By March, the unemployment rate rose to 4.4% from a historic low of 3.5 % in February. However, the rate has soared past 20%. There are more than 26 million people out of work with 4.4 million Americans claiming unemployment benefits in the week ending 18 April.
According to the U.S. Bureau of Labor Statistics, 7.1 million Americans were unemployed as of March 13. In total, over 33 million are unemployed which makes the unemployment rate 20.6%- the record high since 1934. The economic impact could exceed the impact of World War II.
There is also a disparity in the job loss based on race and ethnicity. The March jobs data showed that white people's employment fell by 1.1% last month, more for black people (1.6% drop), 1.7% for Asian Americans, and 2.1% drop for Latinos. The disparity could be because, in industries that are first hit by the coronavirus such as hospitality, transportation, utilities have a disproportionate number of Black, Asian, and Latino workers.
According to the Labor Department, the ability to work from home during this crisis is also divided. 30% of the white population, 37% of Asian Americans, and only 20% of Black people and only 16% of Latinos are able to work from home in 2017 and 2018.
JP Morgan predicts that the economy will bounce back strongly in the third and fourth quarters based on the assumption that the outbreak will be contained by this period. Policymakers across countries are implementing fiscal and monetary measures to ease the financial burden on people and to keep the economy floating which is under a severe strain.
The unprecedented fiscal and monetary policy to save the global economy would result in a faster rebound but the recovery will take time, even till the end of 2021. The recovery would be more of a U-shaped rather than a V-shaped recovery. By the latest poll, the growth rate is 4.5%, which is less than the IMF's rate of 5.8%.
A new report by McKinsey & Company predicts that the recovery of the US and Eurozone economies from the coronavirus crisis will stretch till 2023.
The ILO has urged for large-scale measures and cooperation to protect workers, urgent and right policy to stimulate the economy and retain employment through paid leave and other support.
Job seekers in the time of Coronavirus
In the battle to contain the virus and with so much uncertainty going on, there is almost no demand for jobs. However, we might be heading to a new way of seeking jobs and getting hired once we see an economic recovery.
There might be a transition from in-person job interviews to online. Candidates might need to upgrade their technology to have better quality audio and camera settings and a good internet connection to get hired.
Job seekers will have to adapt and learn how to present themselves virtually for job interviews. They will have to be alert and be well informed about the industries in demand during the outbreak and decide their course of action.
We might see improved platforms that companies will develop to organize virtual interviews or meetings. For the time being tools like Zoom or Hangouts are convenient for video conferencing for work from home jobs. If COVID-19 is to stay for the long term, at least for another two years, we will have to adapt to new ways of working and living.
According to recent data released by the central bank, Mexico received an impressive sum of nearly $5.7 billion in remittances during the month of May, setting a new monthly record. However, analysts caution that the strength of the peso against the dollar may have mitigated this achievement.Since the majority of remittances to Mexico originate from the United States, the value is recorded in dollars. Goldman Sachs analyst Alberto Ramos explains that "a strong peso hurts remittances," referring to the fact that the appreciation of the Mexican currency has an adverse effect on the funds received when converted from dollars to pesos.Interestingly, the peso has emerged as one of the top-performing currencies this year, appreciating over 13% against the U.S. dollar between May 2022 and May of this year.Due to the peso's appreciation, when measured in local currency, remittances actually experienced a 2.2% decline compared to the previous year, as stated by Ramos.Mexican President Andres Manuel Lopez Obrador has consistently highlighted the positive impact of remittances on the country's economy. The funds, primarily originating from the United States, have played a significant role in Mexico's economic growth.In 2022, Mexico recorded a record high of $58.5 billion in remittances from abroad, making it the second-largest recipient country, trailing only behind India.Despite the challenges posed by the "super peso," the dollar value of remittances sent in May increased by nearly 11% compared to the previous year.The latest data for May reveals a substantial jump of almost 14% compared to the previous month, resulting in a total inflow of funds reaching $24.67 billion this year.Notably, this amount surpasses the combined revenue generated by oil and agricultural exports during the same period, as noted by analysts at Mexican brokerage Monex.Analysts at Monex and BBVA attribute part of the May surge to the celebration of Mother's Day, suggesting that around 10% of the increased transactions can be attributed to this commemoration.The number of transactions in May experienced a 7% year-on-year increase, reaching a total of 14.56 million. Furthermore, the average amount per transaction rose by 3% to $391.Goldman Sachs' Ramos emphasizes that the strength of remittances reflects the robust U.S. labor market and visible wage growth, particularly in sectors where Mexican citizens are prominently represented.To compare today's best rates when remitting money to Mexico, use CompareRemit's easy-to-use USD to MXN exchange rate comparison tool!
CompareRemit is thrilled to announce the launch of our NEW Spanish language website! Spanish speakers can now effortlessly navigate through the CompareRemit website to compare exchange rates, fees, and transfer time when looking to send money overseas using one of our trusted partners. Fully understand the offerings of online remittance companies and compare their services with ease while browsing our Spanish-translated site. In addition to making comparisons easier to navigate in Spanish, we have also launched a Spanish blog dedicated to money transfer guides and topics that will help Spanish speakers better understand how to send money online, how to use money transfer apps, reviews of the best remittance companies, and so much more. Plus, we don’t use Google translate for our Spanish-language supported website; our site is translated by native Spanish speakers to ensure that you are receiving accurate and helpful information. How to Navigate the New CompareRemit Spanish Language SiteStarting on the homepage, check out the current exchange rates for top remittance countries, including USD to MXN. These are the best available market exchange rates offered for the moment. You can also manually enter in how much money you are looking to send and to which country, which will redirect you to a new page detailing the company choices you have. You can compare exchange rates, transfer fees, transfer time, and coupons available from our trusted partners. If you are looking for more information on the best ways to send money overseas or tips and tricks when it comes to exchanging or transferring money, be sure to navigate to our blog section. Here, you’ll find detailed articles related to remittance to help make your money transfers easy and seamless. Find detailed money transfer guides, the latest news, and more! To see what offers our current partners have, check out our coupons page. Here, you’ll find the latest deals that our trusted remittance partners are offering. Typically, you’ll be able to get a special exchange rate for your first transfer, or money off your first transaction. Don’t miss these deals, because they don’t last long and help you save even more money when sending cash overseas. Lastly, if you have any questions or concerns while scrolling our site, head to our contact us page where you can send us a message. We will get back to you as soon as possible! We hope that our new Spanish website helps Spanish-speaking visitors to easily navigate the CompareRemit website. Use our website before sending any money overseas to get the best exchange rate, lowest transfer fee, and fastest turnaround time. Compare USD to MXN today!
The Indian Rupee has closed at a 20-week low against the US dollar. Paired with the unexpected outcome of the US presidential election this past week, the main reasons for dragging the rupee down can be accredited to the strike on black money via demonetization of high-value currency notes and weak industrial output. The US currency, in turn, has strengthened based on speculations that the policies of the US President-elect Donald Trump would be inflationary and lead to a rise in the interest rates, thus impacting foreign money flow to emerging countries like India.Foreign investors withdrew over Rs. 2,350 crore from the stock markets as the US-backed assets are looking more attractive and as a result, the economy is expected to improve in the coming quarters.According to India ratings, the sudden decline in money supply and a simultaneous increase in bank deposits - due to withdrawal of 500 and 1000 rupee notes - will adversely impact consumption demand in the economy. This, coupled with the depreciation of real estate, construction and informal sectors, will further weaken the rupee in the upcoming months. It is very much possible in the upcoming months, as well as even forecasted by many agencies, that US Dollars will become stronger against Indian Rupees. All this means is that the spending power of the NRIs will increase, leading to a rise in the remittance flow to India.Compare. Save. Send Money Home Wisely.TODAY'S BEST RATE USD to INRAdditional ReadingHow will India's Currency Ban Affect NRIs in the USA?How India's currency ban of Rs. 500 & Rs.1000 will affect NRIs?How much Indian Rupees can one carry to India?
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