Waltham, Massachusetts; Savannah, Georgia; Plainwell, Michigan; and Chicago
With terrible timing – like buying stocks in 1929 – Cam Jennings started his company, ACTIVATE.vegas, on March 2. The start-up’s mission is printing and distributing handbills for businesses on the Las Vegas Strip. Two weeks later, Nevada’s governor ordered all the casinos to close, and Mr. Jennings had no choice but to suspend operations.
“We kind of hit the ground running on the Strip, but there was no Strip to get running on,” he says, ruefully.
For Alyson Arnold of Warwick, Rhode Island, the problem was postponements. A ceremony officiant, specializing in outdoor weddings, she was preparing to conduct 60 weddings in 2020, her best year ever. But in early March, as concerns grew about travel, the postponements began rolling in: two in March, three in April. Of the five ceremonies scheduled in May, two are already being rescheduled.
One of the worst things? The uncertainty. “Everyone’s sitting on the edge of their seat waiting for what will happen,” she says.
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Three weeks ago, these workers had jobs. Suddenly they don’t. The threat of the coronavirus hit the economy like a tempest out of nowhere. And just as storms typically wreak more havoc on trailer parks than ritzy suburbs, this one appears to have hit the most vulnerable workers first. But there’s more: Because “social distancing” is the essence of the virus response, jobs rooted in social contacts face some of the biggest disruptions.
Those, like Mr. Jennings, in the experiential marketing industry, staffing booths at conventions or handing out branded memorabilia at sporting events, quickly lost gigs when the first restrictions on huge crowds were put in place. Self-employed people reliant on private gatherings, like Ms. Arnold, were next.
Now, the forced closure of nonessential businesses in many parts of the United States has pushed huge numbers of full-time employees – often in low-paid service industries – onto the unemployment rolls.
Dennis Roberson, a divorced father of four, can chuckle about his last paycheck from the Wormhole – a bar and music venue in Savannah, Georgia, that like other nonessential businesses in town was forced to close. The check got torn in half by accident. When he went to cash it Monday, it got a little surreal.
There was a long queue outside the bank. That was a new one. It was “one in, one out,” he says. Still, the check cleared. Its amount: $195. “I realized that’s all I have for the foreseeable future,” he says. “Pretty wild.”
Now, he has arrived at Forsyth Park, sporting a knit cap, sunglasses, and a white beard, after biking to Domino’s to pick up a free pizza from a promotion. He sits down under a tree to eat, puts his ear buds in, and closes his eyes.
It’s not yet clear how many Americans have been laid off. Last week, the U.S. Bureau of Labor Statistics reported that a record 3.3 million workers filed a first-time claim for unemployment – more than four times the previous record set in 1982. On Wednesday, payroll firm ADP’s research institute released a report showing that as early as mid-March, sectors such as retail and wholesale trade, transportation, construction, and administrative support services (including temp work) were starting to shed thousands of workers.
Biggest effects among low-paying jobs
“Much bigger job losses are coming,” warns Mark Zandi, chief economist of Moody’s Analytics. Some 56% of U.S. counties, representing 80% of the nation’s GDP, are in some form of lockdown, he says, although many employees continue to work from home. In all, about a quarter of the economy is shut down, he estimates, so he expects the unemployment rate to hit 10% to 13% this month.
That would be as bad or worse than at the height of the Great Recession. Some economists expect even higher levels of unemployment. The data also suggest that workers in some of the lowest-paid occupations were among the first to be laid off. “Low and low-middle income households are being hit hardest by the crisis,” Mr. Zandi says.
In Massachusetts, one of the top five states reporting first-time jobless claims last week, the biggest surge came in the health-care and social assistance sector. These workers run the gamut. Nearly half of them are home health aides, delivering care to the home-bound and earning nationally an average $24,000 a year. The rest are licensed nurses (earning twice as much) and medical and health services managers (earning four times as much). Last week, more than 18,000 of them filed for unemployment in Massachusetts, up from 440 the week before, a mind-bending 4,000% increase.
“Over 37 million U.S. jobs may be vulnerable to potential layoffs in the short term,” conclude researchers at Cornell University’s law school. That’s assuming that the current crisis does not result in wider-spread, long-term layoffs. Of those 37 million nonsupervisory jobs, all but 2 million are low-quality, low-paid ones paying less than $28,000 a year, as measured by the researchers’ U.S. Private Sector Job Quality Index. The biggest group, more than a quarter of those at risk: workers in restaurants and other food-service positions.
Concerns beyond finances
In the Lake Michigan shoreline community of South Haven, Michigan, Dolly Harris has been a server at downtown’s Phoenix Street Café for 19 years. She and her co-workers were laid off March 16, as Gov. Gretchen Whitmer called on restaurants and bars to close except for takeout or deliveries. Now Ms. Harris will be relying on Social Security and unemployment benefits to help make ends meet. She was able to complete the online process of applying for unemployment after a few frustrating hours of system freeze-ups. As of March 29, she still did not know how much she will be receiving, but expects to learn this week.
Finances aren’t the main concern for Ms. Harris. The virus is top of mind, particularly because her husband has been diagnosed with a pulmonary disease that makes breathing difficult. “I’m afraid to go out and do something in public,” Ms. Harris says. “I thought about working a job at Meijer [a regional supermarket], but I really don’t want to bring anything home like the virus.”
The distinguishing feature of the current downturn is its speed. “It was like bing, bang, boom! Next day, no restaurants!” says Joe Ryal, a bartender at a restaurant on Chicago’s North Side. “We’re all unprepared.”
Retail workers face similar shocks. This week, a slew of chains announced extended closures and furloughs, including Macy’s (a majority of its 125,000 employees) and JCPenney (many of its 85,000 workers).
And the sudden brake-pedal on economic activity isn’t affecting low-paid occupations alone.
“I’m 100% commission based. When they issue a stay-at-home order, they made us part of that,” says Eric, a commercial realtor in the southwest part of Michigan who declined to have his last name published. Because of the long lag time between showing a property and closing a sale, “the impact if you’re not working can be severe. … When you have three months where you can’t show any properties, that’s more like eight or nine months where you’re not making money.”
How long the virus threat and its economic repercussions will last is a burning question for many of the newly unemployed.
“To be honest, it’s been pretty scary,” says Ashley D., a bartender at a major national restaurant chain outlet in Oakland County, Michigan. “I’m hopeful life will be back to normal in a few months, but even if this did all quickly resolve or improve, I’m afraid it would take a lot of time for people to feel comfortable coming back, both employees and guests. I know I’m leery about coming back right away.”
“We are confident, we are thinking hopefully, that business will come back,” says Jesús Morales, who worked conventions, banquets, and private meetings for 33 years at the Drake, one of Chicago’s fanciest hotels, serving the wealthy and occasionally the famous, including Bill Clinton, George W. Bush, and Princess Diana. (Noticing his name tag, she told him she was delighted to be served by a man named Jesus, he recalls.)
When tips were generous, he could bring home more than $1,000 a week. Now, as he relies on unemployment payments to cover his bills, he worries about when the hotel business and other activity will recover.
“I don’t think it will come back as strong as before. I think it’s going to take a while,” he says.
According to Mr. Zandi, the economist, it will take three to four years to get back to something resembling full employment.
Some help is on the way to ease the adjustment. Congress’s new $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act authorizes $1,200 for adults and $500 for children in low- and middle-income families. Checks are expected to go out over the next three weeks. Unemployment benefits also get a boost over the next four months: extra money and extra weeks of eligibility. Crucially, for many of the newly jobless gig workers and self-employed, the guidelines have been loosened so they qualify for the first time.
Ms. Arnold, the wedding officiant in Rhode Island, was able to sign up online on Monday. Mr. Jennings, the Las Vegas handbill entrepreneur, has had too many gigs to file online and so far has only gotten a busy signal when calling in to the unemployment office.
Helping each other
In the meantime, he’s serving as spokesman for the Help the Gig Economy – Coronavirus Income Relief fund, a GoFundMe campaign aimed at helping 100 experiential marketing workers, who often travel from state to state to work conventions and other events. The sponsors aim to raise $50,000 in 100 days. As of Wednesday, they’d raised more than $5,400 and helped 12 of the more than 600 people who have applied for aid.
“It’s been very grassroots,” Mr. Jennings says. “Most of our donations are people within the industry kicking in 20 bucks.”
A similar spirit is taking place in Chicago as workers in the food industry rally to help each other. On a warm spring day, the newly jobless Mr. Ryal has just emerged from the Big Star restaurant, which is giving away free food to workers in the service industry from 5 to 7 p.m – a scene repeated at other venues around the city.
“I’ll be able to survive,” says Mr. Ryal, holding a brown paper bag of groceries and a Styrofoam container holding a serving of carne asada. “We’re leaning on other people.”
Back in Savannah, Forsyth Park is nearly empty due to the stay-at-home order.
“I’m the captain of my own ship – and it’s not moving at the moment,” says Mr. Roberson, the now-unemployed father. “Still, my plan for now is just to ride the waves to where they are going to take me.”
He looks down at the pizza box. His predicament of looming poverty isn’t so dire as to exclude consideration for others. “Want a slice?” he asks.
This story was reported by Monitor staff writers Laurent Belsie in Waltham, Massachusetts, and Patrik Jonsson in Savannah, Georgia, and by contributors Lee A. Dean in Plainwell, Michigan, and Richard Mertens in Chicago.
Editor’s note: As a public service, we’ve removed the paywall for all our coronavirus coverage. It’s free.