There are still a lot of unknowns around what coronavirus will mean for the economy, and we won’t have a full picture of the decline — how sharp, how deep, and how long — for quite some time. But there’s little doubt that a recession, at the very least, is here. Broad swaths of the economy have been shut down, and the situation is likely to get worse before it gets better.
And while medical and health care workers are obviously on the front lines of the health crisis, low-wage and working-class people are on the front lines of the economic crisis. In some cases, they occupy the posts we’ve deemed “essential” to keep things up and running — people who work at grocery stores and pharmacies, and in delivery. But hundreds of thousands, and likely millions, of others are the first ones losing their livelihoods as businesses such as restaurants, movie theaters, and shops across the country shutter.
According to estimates from the US Private Sector Job Quality Index, a project from Cornell University Law School and others, more than 37 million in jobs in the United States are vulnerable to layoffs in the short term. And the most vulnerable workers are those who can’t afford it. Here’s a chart showing which industries will likely be hardest hit by short-term layoffs, and how many of those are considered low-wage:
The Job Quality Index team estimates that some 35 million low-wage and low-hour jobs, defined as those with a weekly average income of under $800, are at risk right now. Its estimates focus on workers in sectors “that are effectively being forced to shut down” right now because of the coronavirus, a paper outlining the estimates explains. “There is a subset of these workers, in jobs often offering substantially less income than the above average, who are particularly vulnerable to cessation of economic activity due to the spreading pandemic. Many occupy front-line, customer-facing jobs that offer both low hourly wages and a limited number of hours of work per week,” the paper reads.
Restaurant and food service workers risk layoffs in the near term (if they haven’t lost their jobs already). Also hyper-vulnerable: employees in retail, education, entertainment, and travel.
Unemployment numbers in the US are about to skyrocket
If you don’t already know someone who has lost their job amid the coronavirus crisis (or you haven’t lost your job yourself), you will soon.
The restaurant industry has ground to a halt across much of the country, with businesses being ordered to shutter entirely and social distancing keeping people at home. The same goes for department stores and retailers, gyms, hotels, nail salons, barbershops, and multiple other industries and sectors. Indicators show that the unemployment numbers are likely to get very high, very fast.
Weekly jobless claims rose to 281,000 nationally the week ending on March 14, and Goldman Sachs estimated the number would climb to 2.25 million from March 15 to 21. As Vox’s Matt Yglesias explained, the number of unemployment insurance claims coming in across the country is on track to be “so unprecedented it’s quite literally off the charts”:
The surge is so large that there’s basically no way to forecast what’s next for the economy since we’ve never seen layoffs occur at this pace in the past. It’s a scary situation that underscores the extent to which this recession is not the same as the 2008 Great Recession — it might be worse.
Some estimates predict near-catastrophic levels of unemployment. St. Louis Fed president James Bullard estimated the unemployment rate could soar to 30 percent in the second quarter of the year, which according to Reuters would be worse than the Great Depression and Great Recession. Others have been more conservative — but still pessimistic — in their outlooks. Morgan Stanley economists in a note on Sunday estimated unemployment will average nearly 13 percent in the second quarter of the year, nearly quadruple what it was in February.
CEOs aren’t losing their jobs over this yet. Average workers are.
It’s always better to be in the C-suite than on the sales floor, and the coronavirus crisis is about to show us just how much.
People who work low-wage and hourly jobs are already vulnerable in a ton of ways. How many of them have savings to tide them over? How many of them are already in debt? How many never had health insurance in the first place, or — because in the United States, health insurance is often tied to one’s job — are about to lose coverage along with their paychecks?
Washington lawmakers are currently debating whom to bail out and how as an $1.8 trillion stimulus package stalls in Congress. As Vox’s Li Zhou and Ella Nilsen explain, a “major sticking point” of the bill is $500 billion in loans and support to corporations and how much oversight should be tied to it to ensure companies use the money to keep workers paid and employed, not to pay bonuses to CEOs and dividends to shareholders. But a perhaps more urgent part of the bill, at least right now, is a potential payout to everyday Americans. For many workers, it’s about to feel like the sky is falling, if it doesn’t already, and they need the money now.