Economists fear low-wage service workers face a devastating winter as the latest wave of Covid-19 shutdowns once again hold buyers and customers home.
As more states work to close or limit crowds at malls, restaurants and gyms, workers in the retail and food service industries are able to repeat the cuts massive jobs in the spring, according to Daniel Zhao, chief economist of the jobs site Glassdoor.
After many states allowed domestic businesses to resume operations during the summer months, some are now moving to limit gatherings as hospitalizations reach record levels across the country.
Starting Monday, indoor dining room will be banned in New York, Governor Andrew Cuomo said on Friday. California Governor Gavin Newsom has limit restaurants in several areas for pickup and delivery, the limited capacity of retailers and asked residents to stay in their homes “as much as possible”.
Pennsylvania has banned indoor dining for three weeks starting Saturday, while Delaware announced capacity limits and a 10-hour curfew at its bars and restaurants.
“When you look at the holistic picture, it looks like the recovery is slowing down considerably as winter approaches,” Zhao said.
Signs of difficulties appeared in early November when hiring on the labor market slow motion strongly, the US Department of Labor reported last week. Retailing has lost jobs overall, even after adjusting the numbers for seasonal layoffs.
Last week, the first applications for Unemployed Claims in the United States rose nearly 20 percent to 853,000 after a lull during Thanksgiving, reaching the highest level since mid-September.
The data “is the first really clear sign that we are going in the wrong direction,” said AnnElizabeth Konkel, economist at Job Indeed.
November’s hiring in food preparation and service was 15% below its level at the same time in 2019, Konkel said. By the first week of December, hiring had fallen 18% below 2019 levels.
“We’re already starting to see a slippage in the restaurant business and I attribute that to winter, the rise in virus cases and the fact that only consumers really care to go out and find out if they are. ‘it is alfresco dining, hospitality or going to retail stores’. Ms. Konkel said.
The latest jobless claims report showed just how widespread the spike in jobless claims is, with 47 states reporting increases. It has also spread beyond the traditional labor market.
Claims for Pandemic Unemployment Assistance, a program that provides benefits to self-employed and small-scale workers who do not qualify for conventional unemployment benefits, also rose, to 427,609 from 288,234 the previous week.
Many of these workers could find themselves in financial crises after this post-Christmas program expires, Konkel said.
The dismal report puts more pressure on Congress to tackle the unemployment crisis. The White House has proposed a $ 916 billion stimulus package that includes one-time checks of $ 600 for each taxpayer while cutting funding for extended federal unemployment benefits – a provision many Democrats deem necessary. Lawmakers have yet to reach an agreement.
Mr. Zhao and Ms. Konkel said they did not believe that an approved and widely distributed vaccine on its own would be enough to end the unemployment crisis.
“We know the vaccine offers a light at the end of the tunnel this summer and it is just important that the action of Congress can help Americans get through the next few months,” Zhao said. “It’s about making sure Americans have the money to feed their children and stay in housing during the winter.”