In New Orleans: ‘The Whole City Is Laid Off’

NEW ORLEANS (AP) — Barely a week ago, David McGraw was cooking daily for hundreds of fine diners at one of New Orleans’ illustrious restaurants. Today he’s cooking for himself at home — laid off along with hundreds of thousands of people across the country in a massive economic upheaval spurred by efforts to slow the spread of the coronavirus.

U.S. Department of Labor figures to be released Thursday are expected to shatter the old record for the greatest number of new unemployment claims filed in a single week. There are more suddenly jobless Americans than during the Great Recession — and more than in the aftermath of major natural disasters such as hurricanes, fires and floods.

Nyla Clark, 3, and her mother, Chavonne Clark, seek help on a New Orleans street Wednesday. Clark was a phlebotomist until she lost her job because of the coronavirus pandemic. She is waiting for unemployment benefits. (David Grunfeld/The Advocate via AP)

But McGraw and others like him don’t need official numbers to understand the new realities of life in one of the nation’s hot spots for the virus that causes the Covid-19 disease.

“The whole city (is) laid off. Everybody,” said McGraw, using an exaggeration that didn’t seem like much of one. “Everybody who worked at a restaurant is laid off.”

Restaurants, hotels, airlines, automakers and entertainment venues all have been hit hard as cities, states and entire countries have ordered the closure of nonessential businesses and directed residents to remain at home.

Virus precautions have affected the worldwide economy. Companies in Europe are laying off workers at the fastest pace since the global financial crisis in 2009, according to surveys of business managers.

Official labor statistics for Europe are not yet out, but companies have been announcing tens of thousands of job cuts, permanent and temporary. The rise in joblessness may not be as sharp as in the United States, however, because it is harder to fire workers in Europe, where many governments are supporting companies financially to keep workers on partially paid leave.

Some economists project that the United States could see around 3 million new unemployment insurance claims when figures are released for the week of March 15-21. That would be around 12 times as many as the previous week.

“It’s going to be an astronomical increase,” said Constance Hunter, president of the National Association for Business Economists and chief economist at the accounting firm KPMG. “We don’t have any recorded history of anything like this.”

In Labor Department records dating to 1967, the largest seasonally adjusted one-week number of new unemployment insurance claims was 695,000 in October 1982, when the national unemployment rate was around 10%.

Before coronavirus concerns escalated this month, the U.S. unemployment rate had been at a 50-year-low of 3.5%. That is certain to rise as the number of laid-off workers soars.

In Louisiana alone, 71,000 people filed new unemployment applications last week, compared to the usual 1,400 or 1,500 people per week, said state Labor Secretary Ava Dejoie.

Louisiana has one of the highest per capita counts of coronavirus cases in the nation. Gov. John Bel Edwards has ordered nonessential businesses to close, limited restaurants to takeout and delivery, banned gatherings of more than 10 people and directed residents to remain at home.

New Orleans restaurant owner and caterer Keisha Henry said she lost $10,000 in revenue last week after three big functions she was to cater canceled. She still has expenses from launching a bar and lounge six months ago, and had to lay off several employees.

“I wish I could just keep them on and pay them, but being a small business, I don’t have enough capital to pay for the employees when we are not putting out a product,” she said.

Workers can seek state unemployment benefits immediately after losing their jobs. But it typically takes two to three weeks before they receive any money, because state agencies have to contact their former employers to verify their work history and then calculate the amount of their weekly benefits based on their previous wages.

That wait could last longer because of the sudden spike in unemployment claims. People should expect “that first benefit payments will take much longer than 21 days,” California’s Legislative Analyst’s Office warned this week.

California Gov. Gavin Newsom said Wednesday that 1 million unemployment claims had been filed in his state since March 13, a span a little longer than the federal reporting period.

Until last week, many state unemployment agencies had been staffed to handle a comparative trickle of claims. Now they are scrambling to add workers to handle the influx.

“Nobody can ramp up that fast without a little bit of a hiccup,” said Michele Evermore, a senior policy analyst at the National Employment Law Project, a New York-based group that advocates for low-wage workers and the unemployed.

Legislation signed last week by President Trump could distribute $1 billion to states to help with administration of unemployment claims. But it could take a while for that money to appear.

Under legislation pending Wednesday in Congress, unemployed workers would get whatever amount a state usually provides for jobless benefits, plus a $600 per week add-on funded by the federal government. That boost could last up to four months.

Though the extra money could help, it may not eliminate the uneasiness among the newly unemployed.

“I think we are putting a lot of hope that the system will return to business as usual in the coming weeks, and I just don’t believe that to be true,” said Ian Smith, who was laid off from his job as a server at an Atlanta-area restaurant. “The biggest thing keeping many of us up at night is what will the new normal look like?”

Many recently unemployed workers have reported frustrations with jammed phone lines and overloaded internet sites as they try to apply for unemployment aid.

Corey Rickmers, of Rockville, Maryland, was furloughed last week from his job as a digital engagement manager for a publishing company. This was his first time filing for unemployment benefits, and his claim was complicated by the fact he previously had worked out of state.

Rickmers said it took several hours of phone calls Monday before he finally reached a person who could help him at the state’s labor department.

“The process is frustrating,” he said. “I can only imagine what millions of people around the country … are having to fight for right now.”

Florida Gov. Ron DeSantis said a recent survey of more than 6,600 businesses in his state showed more than half have laid off employees. Normally, the state’s Department of Economic Opportunity receives 250 to 1,000 unemployment claims a day. DeSantis said the agency received 21,000 claims on Monday.

“We are working on getting them the relief,” DeSantis said. “But, man, that’s not only going to have an economic cost, that will have a health cost, unless we work hard to remedy that as soon as possible.”

Rene Morgan, a web developer who lives in Davie, Florida, is among those filing new claims.

He had been working for only a couple of weeks at a biotechnology startup when he was let go this month after the company’s supply chain from China was disrupted. He is putting his collection of typewriters for sale on eBay to make money to pay rent while he waits to receive unemployment benefits from the state.

“I check back every day, and it keeps saying that my application is being processed,” Morgan said.

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