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“Three months later, there’s been no call” – Losing Hope for Rehiring

Last Update: June 24, 2020

NEW YORK — Eric Benz wasn’t that worried when he was laid off by his graphic design firm in Atlanta this March. He was sure he would get a call to come back to work once the viral pandemic eases up and his firm’s clients continue spending. 

Three months later, there was still no call. Instead, Benz applied for a gig job as an Instacart shopper

Benz’s unemployment benefits have not yet come through, and the time to pay the bills has arrived. Luckily, Benz negotiated with his mortgage lender to defer payments to the home he and his wife had bought earlier this year. But the delay is not going to last long.

“I’m doing everything I can. It’s going to take a little while to get back,” said Benz.

Consequences Are Becoming Clear

As the U.S. economy is coming back to life, the job cuts are slowing down and some laid-off people are being called back to work. The consequences left by the pandemic have become painfully obvious to millions who hoped for a quick return to their jobs: they may not be back any time soon. 

With many companies re-opening, the government revealed last week that the economy had added 2.5 million jobs in May and that the unemployment rate had dropped from 14.7% to 13.3%. This announcement came as a surprise due to expectations of further layoffs. 

The harsh reality is that rehirings from last month are not expected to continue at the same pace. Forty-two percent of the layoffs caused by the pandemic could lead to permanent job losses, according to a study by the Becker Friedman Institute for Economics at the University of Chicago. Many businesses, from tech start-ups to small shops and large retailers, may not survive the economic losses despite federal rescue aid.

What Will Happen When the Aid Runs Out

That aid is going to run out soon. And despite steady re-openings, the public’s fear of the virus still keeps many people away from bars, restaurants, hotels, hair salons, and similar places. Only a few plan on traveling. All kinds of sports and forms of entertainment are still on hold.

This collective slowdown continues to keep millions of laid-off people on the sidelines. In April, 78% of unemployed people thought of their unemployment as temporary. According to the job report, this number dropped to 73% in May. And a decreasing number of unemployed is listed as temporarily laid off. 

Alex Jansen’s company reopened Monday in Charlotte, North Carolina. But Jansen, a marketing consultant, didn’t get the call asking him to go back to work as expected. He is now spending his time learning Adobe programs to improve his resume. As unemployment benefits run low, he wonders if he’s going to feel forced to leave Charlotte, where job opportunities now seem scarce. 

“Everything evaporated because of the virus. This job is feeling like it’s in limbo”, said Jansen, 33. 

It took the economy five years to recover the 8.8 million jobs it lost during the Great Recession. This time, given the rise in employment in May, some 20 million jobs have been lost. 

There were 2 new hires for every 10 layoffs, the University of Chicago study reports. 

What Will Happen When the Aid Runs Out

Job Market Predictions

“The job picture is horrible,” said Nicholas Bloom, an economist who was a part of the research team. He also said he can’t see the U.S. job market returning back to normal for another five to ten years.

Dawn Abbott’s tiny corporate event company in Denver was struck early in the pandemic. In the first wave of measures, corporate customers canceled dinners, picnics, and fairs. By March, she had furloughed 14 out of 15 of her workers.

Abbott assumed it would be a matter of weeks before everyone would need to get back to work, juggling 20 events a week. Her 19-year-old business was thriving, and she rewarded her staff with raises and provided health insurance. Abbott thought it would be easy to survive a temporary closure

Yet it is gradually becoming clear that it would take much longer for her industry to recover, if ever. Even as companies re-open offices, their clients have made it clear that splashy gatherings will not happen any time soon.

“As things progress, my optimism wanes. My gut tells me it will only be two to five (employees), not 15, by the end of 2020,” said Abbott, who established Fun Productions in 1991. 

Her close team uses Zoom hangouts, trading ideas for virtual programming. They gather for barbecues outside the warehouse where trucks and bouncy castles are sitting idle. Abbot says honestly: not all of them should count on returning to their old jobs. 

In the meantime, Roger Miller, the company’s director of operations, relies on unemployment benefits at the moment. 

As Miller said:

We thought, 30 days, no problem. Everyone go home, work on your house, take this time off.

After it turned into sixty days, and then ninety, it became frustrating.

Industries That Were Hit the Hardest

Businesses like this one, a part of the leisure and hospitality industry, have been the hardest-hit businesses during the pandemic. This sector lost a shocking 7.5 million jobs in April, 1.2 million of which were back in May. But while many restaurants and bars are partially re-opening, it will take a long time for the crowds to return to the arenas, theaters, and stadiums or to plan any kind of big events. 

Lowell Taylor, an Economics Professor at Carnegie Mellon University’s Heinz College, explains these kinds of things are going to be tough. Getting together as humans to enjoy things seems like a bit of a luxury right now. That’s where unemployment is going to be an issue the longest. 

What about the diamond selling business? Jef Andrews asks his manager every week if he can return to his job as a jewelry designer and salesman in Minneapolis. So far, there are no updates. Andrews said:

I’m just floating in limbo and watching the world fall apart.

Also, his health problems make physically demanding jobs impossible. 

Across the job market, the few areas where hiring was lively are the industries where businesses started booming as a result of the pandemic — from grocery stores to online shopping and streaming entertainment. Some supermarket chains such as CVS Healthcare and Kroger have gone so far as to partner with hotels, airlines, and retailers in order to offer employment to their laid-off workers. 

About Taking Lower-Paying Work

Many people are still reluctant to take lower-paid jobs until they know for sure that their old jobs are gone for good. They’ve gotten help through the $600 weekly federal supplement to state unemployment benefits. However, that aid will expire after July, and it seems unlikely that it will be renewed. 

Kumelachew Yigletu’s biggest fear is that his federal help will come to an end before he can return to work. Yigletu, a father of three, says that after losing his job as a baggage handler at Ronald Reagan Washington National Airport, the weekly supplement is the only thing he has to pay his $1,600 monthly rent, along with other bills. 

His employer, Eulen America, told him that he had to re-apply for his old job, and there were no guarantees. At this point, he ‘s going to “take anything.” 

“The most important thing I do with my family is pray every day for this country. I love America,” said Yigletu, an Ethiopian immigrant.