US economy

Some Americans fear their jobs will be lost forever


When the pandemic hit San Francisco in March, Berta Lopez, 47, was earning $1,000 a week doing a mix of cleaning and child care from 8am to 6pm for a couple employed in the tech sector.

The job, paying $20 per hour, helped sustain her household, along with income from two adult sons working in the travel and hospitality industry. But their livelihoods were shattered when the crisis hit: Ms Lopez’s employers could only pay her for the first two weeks of the lockdown, while one son was moved to part-time, and the other was laid off.

Now she has no choice but to accept an offer from the family she worked for to bring her back for just 26 hours a week, hopefully in early June. “I cross my fingers and I pray a lot, because to be honest with you, I spent all my savings and all my backups,” Ms Lopez said in a phone interview. “It’s gonna be tough”.

The travails of Ms Lopez and her family are a warning to policymakers and executives surveying the damage caused by the virus on America’s labour market this spring. The hit has not only been severe, with joblessness rising to 14.7 per cent in April and about 39m Americans left unemployed. But there is growing concern that any recovery will be tainted by fewer jobs, lower wages and less income than many experienced just a few months ago.

Michele Evermore, a senior policy analyst at the National Employment Law Project in Washington, said: “As this wears on and as the public health crisis abates, I’m not sure that the jobs are going to come back and that they’re going to be the same kinds of jobs.”

The economic toll of the virus — and the uncertainty over the future — has been most acute among Hispanics, who form the backbone of some of the industries most affected by the pandemic, including restaurants and hotels, retail outlets and home care. According to labour department data, unemployment among Hispanics soared from 4.4 per cent in February to 18.9 per cent in April, leapfrogging the rate for African-Americans.

Berta Lopez
Berta Lopez: ‘ I pray a lot, because to be honest with you, I spent all my savings and all my backups. It’s gonna be tough’ © James Politi

Karla Hernandez-Navarro, a recent university graduate who works on English-language teaching programmes for Canal Alliance, a non-profit group that serves Marin County, north of San Francisco, says that within the first five days of the shutdowns in March, 55 per cent of her students lost their jobs. Even after some restrictions were lifted this month in California, their struggles continued. “It wasn’t like all of our students returned to work. They’re still looking, they’re still desperate, you still hear it,” said Ms Navarro, speaking by Zoom from her family home in Stockton, where her own father was furloughed from his construction job.

Over the past two months, the Trump administration and Congress have ploughed billions of dollars into the US economy to try to cushion the blow to American households and businesses, including one round of direct transfers worth $1,200 to every adult earning less than $75,000 per year, an expansion of federal unemployment benefits, and a scheme to provide forgivable loans to small businesses so they could keep employees on payroll.

But the impact of these measures will fade in the coming months, and the White House and lawmakers have yet to agree on additional stimulus, adding to the uncertainty for both workers and employers, especially since coronavirus remains a health threat in many communities.

“Here’s the big question we’re struggling with: what’s going to last longer, the money or the virus? Will we be back at work with pay cheques when the unemployment payments end? And if not, how big is that gap going to be? Because a lot of people don’t have the resources to be able to cover that gap for very long,” said Pat “Duke” Dujakovich, president of the greater Kansas City chapter of the AFL-CIO, the largest US trade union federation, at a public event on the state of the economy organised by the Federal Reserve last week.

Karla Hernandez-Navarro: within the first five days of the shutdowns in March, 55% of her students lost their jobs © James Politi

For some families suddenly facing joblessness, even the first round of government help has not been applied evenly and has not always arrived on time. There have been widespread complaints of delays in the rollout of unemployment benefits by US states, which administer the programmes. The Hamilton Project, an economic policy think-tank, has estimated that states paid out $45bn in jobless benefits in April, but that replaced only about half of lost wages and salaries. “UI [unemployment insurance] has been crucial for many people, but it clearly did not reach all who needed it in April,” the researchers wrote.

Gwen, a freelance producer and documentary film worker living in Brooklyn, says she was only just approved for her unemployment benefits on May 18, nearly two months after submitting her initial applications and following countless follow-up calls to New York state authorities. “This is the social safety net we have? No wonder people don’t trust the government. I am furious that it is this hard,” she told the Financial Times.

In Detroit, Karen Addison, 58, filed for unemployment on March 13 but nearly a month later she had still not received any payments. Ms Addison normally books performers for Detroit’s Masonic Temple Theatre, and she is far from sanguine about when she can begin earning money again. “I have no clue when that will come back. That’s like 4,000 seats right next to each other and you can’t do social distancing in a drinks line or make enough money to pay the performers if people sit every other seat. It’s scary,” she said.

Ms Lopez says one of her sons is still waiting for an answer from California on whether he will get unemployment benefits, and she is ineligible. As a household, the only government assistance they received is one $1,200 cheque, which they are using to pay utility bills. For food, they rely on a box of goods that Ms Lopez’s mother obtains at her senior home, which they split in half. “I have faith in God and I know he’s providing for me, but it’s hard,” she said.

Ms Hernandez-Navarro said her community was reeling, and people were now “willing to take a job anywhere”.

“They fear what would happen if they get sick and don’t have access to healthcare, but they are trying to put food on the table and provide for their families,” she said. 



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