Flight attendant Kristine Lambiris kept working after her husband lost his job when the COVID-19 pandemic shut businesses across the US, but as of Thursday evening, she has been furloughed herself.
“We’re both pretty scared,” said Lambiris, a United Airlines Holdings Inc employee and member of the Association of Flight Attendants trade union. “I don’t want to have to be on unemployment and I don’t want to be taking money away from other people.”
This week’s expiration of job-saving federal aid to airlines has set the stage for another round of mass layoffs in the world’s largest economy, where COVID-19 has already caused tens of millions of people to lose their work.
Photo: AFP
The US last month added a less-than-expected 661,000 jobs, but the unemployment rate fell to 7.9 percent, the US Department of Labor said on Friday.
The report is the last before US President Donald Trump faces off with his Democratic challenger, former US vice president Joe Biden, in next month’s US presidential elections, and comes as the US economy finds itself at a crossroads six months into the pandemic.
Key sectors have begun recovering from the coronavirus shock even as layoffs remain commonplace, but with lawmakers in Washington deadlocked on additional stimulus spending, the question now is whether that progress can be sustained.
“Even without stimulus, we could eke out gains that are better than people expect,” Navy Federal Credit Union corporate economist Robert Frick said of the employment report. “But we don’t want to eke.”
The business shutdowns beginning in March to stop the spread of COVID-19 sent the unemployment rate to 14.7 percent in April, although it has since decreased.
The US Congress passage of the US$2.2 trillion CARES Act in March has been credited with stemming some of the bleeding. Airlines hit hard by the drop-off in travel demand were given aid in exchange for keeping workers on their payrolls through the end of last month.
The act also supported consumer spending by providing the droves of unemployed workers an extra US$600 per week in assistance, a massive financial cushion for lower-paid workers.
“What I was bringing home every two weeks at the zoo, I was getting every week of unemployment,” said Nashawn Cooper, who was let go from his job at the Atlanta zoo as the pandemic struck.
However, Congress and the Trump administration could not agree on an extension and the extra payments expired at the end of July, cutting Cooper’s benefits down to US$160 per week — just enough to pay the bills.
Democrats and Republicans have resumed negotiating this week, but it was too late for the airlines, which watched Wednesday’s deadline pass without the aid they had pleaded for from Congress.
American Airlines Group Inc has since announced that it would furlough 19,000 workers, and United 13,000.
Lambiris, who lives in southern California near Disneyland, expects to have to compete for job openings with some of the 28,000 people Disney said this week it would lay off.
“I don’t think the job will be like anything I want,” she said. “It won’t make up for the salary, for sure.”
Analysts have warned that the impasse over stimulus would catch up with the US economy eventually.
Already, US Department of Commerce data released this week showed more Americans dipping into their savings in August, the first full month without the expanded unemployment benefits.
The labor department data reported 837,000 new claims made for unemployment benefits last week, still higher than the worst week of the 2008-2010 global financial crisis.
However, Frick said that indicators like a surge in applications for new businesses as well as data on restaurant reservations, auto sales and travel show that some sectors are recovering, bringing jobs along with them.
“One of the things I think forecasters sometimes miss is how innovative the economy is turning out to be,” he said.
The state of Georgia was among the first to reopen its economy after the shutdowns, and Cooper said he has seen lots of job openings, particularly among retailers.
“I’m not relaxing, I’m not sitting back and saying I don’t have to work,” he said.
Cooper is to meet with a prospective employer next week, but said: “If that doesn’t work out, I’m continuing to look for a job.”
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