money 'I may lose everything': Americans reel from job losses as coronavirus stalls economy
A day before the government revealed a spike in workers filing unemployment claims because of the growing coronavirus, the Texas dental office where Amanda Muckelroy worked let her go because of the crisis.
Making matters worse, the dental hygienist’s adult daughter and son-in-law, who work in event planning and the restaurant industry, also lost their jobs as the illness — officially called COVID-19 — has forced a shutdown of public life across the country.
The rising number of layoffs as the coronavirus spreads have revived Americans’ concerns over paying bills, losing health care, and planning for an uncertain future.
“I do have some savings for some much-needed home repair, but now that will be put on hold to help pay bills,” Muckelroy, 49, said, noting that she doesn’t carry much debt and has been focused in the last few years on saving for retirement. “I may lose everything.”
‘A very bad number’
Muckelroy is not alone in her worries. Layoffs are rising at an breakneck pace. Initial jobless claims jumped 33% to 281,000 the week ending March 14 versus the previous one, according to the Labor Department’s report on Thursday.
“This is a very bad number, the pace of increase here is literally unprecedented,” said Martha Gimbel, manager of economic research at Schmidt Future. She pointed out that, in the depth of the Great Recession, the largest week-over-week increase was 14%.
The data showed drastic increases in unemployment claims in Nevada and Washington, and Gimbel predicted next week there will be a surge in California and New York, where state and local governments this week have issued shelter-in-place declarations and shut down schools, bars, and restaurants.
That’s what claimed Jonathan Sale’s job on Monday.
A bartender at a New York luxury hotel, he and 20 other colleagues were laid off after New York Gov. Andrew Cuomo ordered bars and restaurants to close to help contain the spread of the coronavirus. Acting gigs also were shuttered, hurting Sale’s recording session, which was cancelled.
“I’m a single dad. I’m an actor. I’m a bartender. I have enough money right now, but I’m going to run out of money really soon” Sale, 46, said. But “the main concern is healthcare. Our jobs are tied to healthcare.”
‘In the midst of a pandemic’
Almost half of the U.S. population, or about 156 million Americans, receive health insurance through their employer, according to recent data from the Kaiser Family Foundation.
“If the economy slips into a recession, then people will start potentially losing jobs and health benefits, right as a virus outbreak is going on,” said Dr. John Graves, an assistant professor in health policy at Vanderbilt University. The unfortunate situation is not lost on Muckelroy.
“It’s ironic to me that I am losing my healthcare insurance in the midst of a pandemic,” Muckelroy said. “Dental offices should not have to make these types of choices when lives are at stake.”
Read more: Paying for healthcare: Everything you need to know
The numbers of unemployed are likely to increase dramatically because most layoffs have just started. The Economic Policy Institute estimates that 3 million jobs will be lost in the U.S. by the summer, according to a report it released on Tuesday.
“This week doesn’t contain all of the worst stories that we’re hearing about unemployment insurance systems crashing,” Gimbel said, “about millions of claims coming in one week.”
‘I was in disbelief’
After getting laid off by text on March 5, Timothy Nesmith of Columbia, South Carolina, applied for unemployment benefits, but was told that it would take two to six weeks before he would find out if he was approved.
“I didn’t expect it, it was well before any national closings and public quarantines,” said Nesmith, 25, who added that the owner of the moped sales and repair shop where he worked didn’t know how the coronavirus would affect shipments the shop got from overseas.
“I was in disbelief,” said Nesmith, who, like many Americans, has no emergency savings to fall back on. Two in 5 Americans couldn’t cover a $400 emergency without borrowing money or selling items for cash, according to the Federal Reserve.
Nesmith is looking for another job, but has had no luck. It’s not surprising as the economy slows due to the outbreak. Typically job postings increase early in the year and grow roughly the same rate as previous years, according to report from Indeed Chief Economist Jed Kolko. But this year, job postings are 2.6% slower than in 2019, the report found.
“I’m currently struggling to find a job and a way to pay rent whilst in the middle of a move,” Nesmith said. “My current financial situation is definitely not ideal.”
Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova.
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