'What am I supposed to do?': Covid-19 sparks mass unemployment across US

The US is experiencing an unprecedented rise in unemployment as industries including hospitality and food service grind to a halt

A person walks past an establishment offering take-out and delivery along Restaurant Row in New York, New York, on 20 March.
A person walks past an establishment offering take-out and delivery along Restaurant Row in New York, New York, on 20 March. Photograph: Erik Pendzich/Rex/Shutterstock

Bartender Taylor Cox has refused to check his bank account in the 10 days since he was laid off from an Indiana casino which shut down to stop the spread of coronavirus.

The 29-year-old has bought groceries and paid bills in that time, but he’s worried about what his bank account will reveal after just one week without a job.

“I’m just terrified of opening it up and the prospect of seeing there is $200 and holy crap, what am I supposed to do?” said Cox, one of millions of Americans to lose their job because of coronavirus.

The US is experiencing an unprecedented rise in unemployment as industries such as hospitality and food service grind to a halt. The first official government snapshot of how coronavirus has hit the labor market is due on Thursday, when the labor department releases unemployment figures for last week.

The last department of labor figures showed initial unemployment claims rose to 281,000, a sharp rise from 211,000 the previous week but nothing to what is expected tomorrow.

The Economic Policy Institute (EPI) thinktank estimated a record-setting 3.4 million people filed unemployment claims last week based on an analysis of news reports. Weekly claims have not topped a million since records began in 1967.

Such an increase would set the nationwide unemployment figures to 2015 levels in just one week. “This is overwhelming even our quite strong labor market,” said Heidi Shierholz, EPI’s director of policy.

The surge is also overwhelming unemployment offices. In New York, there were about 159,000 more calls to the labor department in one day than the normal 10,000 daily calls the office gets. In California, the daily average of unemployment claims has increased by more than 4,000%.

Major employers including Marriott and Macy’s have sent staff home. General Electric and airlines including Delta and American are laying off staff as their industries suffer.

Shierholz said despite the gloom, the federal government has the power and resources to intervene. “The economy is taking a big hit, but it is a policy choice, the level of human suffering that is caused,” Shierholz said.

EPI is one of several bodies advocating for the federal government to waive unemployment insurance requirements, such as making people demonstrate they are looking for work; increase funding to social support systems, such as food stamps; place moratoriums on evictions; and allow laid off or furloughed people to continue using their employer-sponsored healthcare so state health insurance programs aren’t overwhelmed.

Worker advocates are also encouraging employers to simply keep paying their employees, because when the crisis is over, those jobs will need to be filled again.

“There’s much more friction to get the economy up and running again, but if you have everybody just hooked to jobs, we can basically just turn the lights back on,” Shierholz said. “That’s the most efficient, good thing to do right now.”

Early Wednesday, Congress reached a deal on what is expected to be the largest US economic stimulus measure ever passed.Democrats and Republicans had been divided on the level of oversight required for industries receiving bailouts. Progressives are concerned the Republican plan would allow billions of dollars to go to business leaders while workers continue to live without pay or health insurance.

“People are doing a public service by staying home. This isn’t unemployment. This is either government-mandated confinement or voluntary confinement,” said Rob Johnson, president of the Institute for New Economic Thinking. “It makes sense for society as a whole.”

Any bailout needs to make sure that those now suffering financial hardship from Covid-19 are protected, he said. “Everyone has a stake in these people being supported.”

In Indianapolis, Cox said he was using his newfound unemployment to contact Congress about workers’ needs. As a union representative, he is also fielding calls from confused colleagues and helping people without internet do online applications for unemployment.

“People are scared, people don’t know what’s going to happen,” Cox said. “The idea of a tipped worker going without tips for eight weeks or more is one of the most frightening things to have to confront. A lot of the people who work there are people with children, single mothers, who rely on money coming in every day.”

His partner also lost their job because of coronavirus, leaving their household with zero income. “We’re all in this really terrible situation but at least we’re all in this together,” Cox said.

Cox is a member of the union Unite Here, which represents 300,000 people in industries hard hit by closures including hospitality, food service, manufacturing and transportation. Last week, the union estimated 80% to 90% of its members would be out of work, but Unite Here’s international president, D Taylor, upped that estimate to 95% on Monday.

“Hotels are shutting down, casinos are shutting down, so all those jobs in there, from a housekeeper to a cook to a cocktail waitress to a bartender to a bellman, they all have been lost,” Taylor said.

An employee of Junior’s Restaurant, which laid off employees due to coronavirus, picks up a paycheck in Brooklyn, New York, on 19 March.
An employee of Junior’s Restaurant, which laid off employees due to coronavirus, picks up a paycheck in Brooklyn, New York, on 19 March. Photograph: Mark Lennihan/AP

The Brookings Institution thinktank said more than 24.2 million Americans work in the five high-risk sectors facing a sharp slowdown. This includes travel, hospitality, employment services, transportation and energy centers, such as Texas oil and gas towns.

The most affected places are famed for their resorts and leisure activities, such as Maui, Hawaii and Las Vegas, Nevada, according to the thinktank.

But Taylor said he was worried about every city in every region of North America. “Every one of our cities is destroyed right now as far as people out of work,” he said.

In Boston, Sam Huertas, a catering attendant at Massachusetts Institute of Technology (MIT), watched with worry as the university began cancelling events of 150 people, then 100 people, then 50.

By the time MIT announced all events would be cancelled through 15 May - the busy season for the university’s caterers – he had realized filing for unemployment in Boston would be tricky. A common unemployment eligibility requirement is for applicants to show they are actively seeking a job, but industries like catering are almost completely shut down. “When I saw other big event spaces were closing, I started realizing things might get complicated in Boston,” Huertas said.

So he decided to move, temporarily, to live with his girlfriend’s family in Maine, where there are more opportunities for work because it has not yet been hard hit by coronavirus.

It was a step forward, but still riddled with uncertainty, until MIT called him on Saturday and said he would be paid as normal through 22 May. “When I found out, that was kind of life-changing,” Huertas said.

Huertas said the support from his employer gave him and his co-workers a sigh of relief. Huertas said: “I have a little more hope for getting through this well.”

More working people need to feel that hope, said Johnson. “This is like a wartime economy,” he said. The government needs to decide what its goals are “and get them done”.