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Another Huge Blow to US Workers 06/05 06:18
America's workers likely suffered another devastating blow in May, with
millions more jobs lost to the viral pandemic and an unemployment rate near or
even above 20% for the first time since the Great Depression.
WASHINGTON (AP) -- America's workers likely suffered another devastating
blow in May, with millions more jobs lost to the viral pandemic and an
unemployment rate near or even above 20% for the first time since the Great
Depression.
Economists have forecast that the government will report Friday that
employers shed 8.5 million more jobs last month on top of 21.4 million lost in
March and April. A figure that large would raise the total losses since the
coronavirus intensified nearly three months ago to almost 30 million -- more
than triple the number of jobs lost during the 2008-2009 Great Recession.
The economy has sunk into what looks like a deep recession, and most
economists foresee unemployment remaining above 10% -- its peak during the
Great Recession -- through the November elections and into next year.
A report Thursday on applications for unemployment benefits reinforced the
picture of a bleak job market: The number of people seeking jobless aid last
week was double the previous record high that prevailed before the viral
outbreak occurred.
Still, that report did offer a few glimmers of hope. As restaurants, movie
theaters, gyms, hair salons and other retail establishments gradually reopen,
job cuts are slowing and employers are recalling some of their laid-off
workers. The total number of people receiving unemployment aid rose slightly,
the government said, but stayed below a peak of 25 million reached two weeks
earlier. And the number of laid-off workers applying for aid, while
historically high, has declined for nine straight weeks.
The economic shock, like the pandemic itself, has widened economic
disparities that have disproportionately hurt minorities and lower-educated
workers. More than 55% of African-Americans say they or someone in their
household has lost income since mid-March, compared with 43% of whites,
according to a weekly survey by the Census Bureau. For Hispanics, the figure is
60%. The pandemic has especially eliminated jobs, at least temporarily, at
restaurants, hotels, retail chains and other lower-wage industries.
The street protests over George Floyd's killing that led to some vandalism
and looting in dozens of cities won't affect Friday's jobs figures, which were
compiled in the middle of May. But business closures related to the unrest
could cause job losses that would be reflected in the June jobs report to be
issued next month.
A few businesses are reporting signs of progress even in hard-hit
industries. American Airlines, for example, said this week that it would fly
55% of its U.S. routes in July, up from just 20% in May.
And the Cheesecake Factory said one-quarter of its nearly 300 restaurants
have reopened, though with limited capacity. Sales at those restaurants are at
nearly 75% of the levels reached a year ago, the company said. Both companies'
share prices rose.
Those limited gains may lead to more rehiring as companies slowly restart
shuttered businesses. But economists say the pace of hiring will then likely
lag as a severe recession and high unemployment hold back consumer spending,
the main driver of the economy.
Erica Groshen, a labor economist at Cornell University and a former
commissioner of the Labor Department's Bureau of Labor Statistics, said hiring
could ramp up relatively quickly in coming months and reduce unemployment to
low double-digits by year's end.
"Then my inclination is that it will be a long, slow slog," she said.
Overhanging the jobs picture is widespread uncertainty about how long the
unemployed will remain out of work. Most of the layoffs in recent months were a
direct result of the sudden shutdowns of businesses in response to the
coronavirus pandemic.
Though many of the unemployed have said they expect their layoffs to be
temporary, many large businesses won't rehire everyone they laid off. And some
small employers might not reopen at all if the recession drags on. Until most
Americans are confident they can shop, travel, eat out and fully return to
their other spending habits without fear of contracting the virus, the economy
will likely remain sluggish.
Even if just one-third of the U.S. job losses turn out to be permanent, that
would leave roughly 10 million people out of work. That is still more than all
the jobs lost in the Great Recession. A hole that size would take years to
fill. Oxford Economics estimates that the economy will regain 17 million jobs
by year's end, a huge increase by historical standards. But that would make up
for barely more than half the losses.
Gwyneth Duesbery, 22, returned this week to her job as a hostess at a
steakhouse where she lives in Grand Rapids, Michigan, as the restaurant
prepares to reopen. Duesbery said she is grateful for the opportunity, given
that she hasn't received unemployment benefits since the restaurant closed in
March and has run through her savings.
She will spend this week helping to clean the restaurant and setting tables
6 feet apart. The restaurant will be able to seat only about one-quarter of its
usual capacity.
The restaurant, Bowdie's Chop House, has reservations for about 20 people
for its opening night Monday and said it has drawn plenty of interest from
longtime customers. Still, Duesbery worries about her health.
"I am concerned that it will expose me to potential diseases, and expose
others, no matter the precautions that we take," she said. "It's kind of
uncharted waters."
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