More and more people are being laid off. How far might unemployment go?
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We’re starting to hear about people getting laid off from jobs at movie theaters, restaurants, bars, stores and other businesses as people stay home because of the threat of COVID-19.
We’ll get a glimpse of where things may be headed Thursday when the weekly unemployment claims data is next reported.
Up until three days ago, Dennis Mendoza worked in sales at a small family-owned store in Florida, Tampa Bay Ponds and Rocks. Business was good until people stopped coming because of COVID-19.
“Business had gotten so slow and I was the last one hired, so the first one let go,” Mendoza said.
He just filed for unemployment but doesn’t currently get any government assistance and he and his fiancée don’t have a financial cushion.
“I mean, I have, like, $100 in my bank account, and that’s about it,” Mendoza said. “I’ve been trying to apply for new jobs, but nobody’s hiring right now with everything going on.”
We don’t know exactly how high unemployment might go in this situation. During the Great Recession, it hit 10%.
Erica Groshen, a labor economist at Cornell, explained what that means: “At 10% unemployment, everybody knows somebody who has lost a job or who has finished school recently and is not able to find a job,” Groshen said.
At that level of unemployment, it takes longer for the economy to bounce back.
“Because there are going to be people out of work, they’re going to have depressed incomes and they’re going to be much more frugal with whatever spending they’re able to do,” said Seth Carpenter, chief U.S. economist at UBS.
COVID-19 Economy FAQs
Are states ready to roll out COVID-19 vaccines?
Claire Hannan, executive director of the nonprofit Association of Immunization Managers, which represents state health officials, said states have been making good progress in their preparations. And we could have several vaccines pretty soon. But states still need more funding, she said. Hannan doesn’t think a lack of additional funding would hold up distribution initially, but it could cause problems down the road. “It’s really worrisome that Congress may not pass funding or that there’s information circulating saying that states don’t need additional funding,” she said.
How is the service industry dealing with the return of coronavirus restrictions?
Without another round of something like the Paycheck Protection Program, which kept a lot of businesses afloat during the pandemic’s early stages, the outlook is bleak for places like restaurants. Some in the San Francisco Bay Area, for example, only got one week of indoor dining back before cases rose and restrictions went back into effect. Restaurant owners are revamping their business models in an effort to survive while waiting to see if they’ll be able to get more aid.
How are hospitals handling the nationwide surge in COVID-19 cases?
As the pandemic surges and more medical professionals themselves are coming down with COVID, nearly 1 in 5 hospitals in the country report having a critical shortage of staff, according to data from the Department of Health and Human Services. One of the knock-on effects of staff shortages is that people who have other medical needs are being asked to wait.
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