Thousands more jobless in Bay Area
As U.S. workers continued to endure the economic storm triggered by the coronavirus and economic shutdown, 2.98 million Americans filed new unemployment claims last week, the Labor Department said Thursday.
New filings for the week ended May 9 bring claims over the past eight weeks to 36.5 million, a stunning turnaround downward after a decade of record low unemployment and economic expansion.
The weekly claims, while high, continue to decline since late March and early April when they topped 6 million for two weeks in a row. The cumulative total remains astronomical and without modern precedent.
The Labor Department last week pegged un
employment as soaring from 4.4% in March to 14.7% in April, while admitting that the reported figure understates the actual number.
“The labor market is a disaster,” said Sean Snaith, director of the Institute for Economic Forecasting at the University of Central Florida.
One of the many ways in which this recession stands out, Snaith said: It’s not naturally occurring.
“We set out to flatten the curve and in the process have bulldozed the economy,” he said.
Unemployment claims have probably peaked, although they probably will continue to be “ugly” for at least another four weeks, said Robert Eyler, chair of the economics department at Sonoma State University.
A factor that could lead to continued or renewed job losses is if the virus begins to circulate rapidly again as some businesses partially reopen, he said.
For California, last week’s claims totaled 214,028, a steep 32% drop from the prior week. The state now has had 4.2 million claims in eight weeks. Gov. Gavin Newsom put the figure at 4.5 million since March 12, which may include some claims still being processed.
The state Employment Development Department said it has processed 4.7 million claims since March 14 and paid out $12.3 billion in benefits. Last week the numbers were 350,687 claims processed and $3.4 billion paid in benefits.
The state started taking applications for Pandemic Unemployment Assistance, which is for gig workers, freelancers and the selfemployed. It received 560,162 applications for PUA benefits in two weeks and processed about threequarters of them, paying out $1.2 billion. The amounts paid come from a mix of federal and state insurance funds.”
Nearly 100,000 San Franciscans have filed for unemployment benefits since midMarch, when the first stayhome orders went into effect, Mayor London Breed said Tuesday at a Board of Supervisors meeting.
Meanwhile, new Bay Area layoffs continue to mount.
In the hardhit fitness industry, for instance, this week YMCA of San Francisco laid off 959 people in San Francisco, 197 in San Mateo and 204 in San Rafael. Similarly, YMCA of the East Bay also had temporary mass layoffs: 247 in Berkeley, 169 in Oakland, 144 in Pleasant Hill and 95 in San Pablo. Another gym, Crunch, laid off 36 in San Francisco. Gyms and fitness centers are expected to be among the last businesses allowed to reopen.
The San Francisco Museum of Modern Art laid off 131 employees. Menlo Park’s Deliv laid of 669 workers and shut down after Target acquired its technology, while Mill Valley’s Glassdoor laid off 81.
Some laidoff workers may return to their jobs next week. Most retail businesses in San Francisco and San Mateo County are allowed to reopen for curbside sales beginning next week, though it is unclear how many businesses will take advantage of the opportunity, how many workers they will rehire, or if customers will show up.
“In the short to medium term, there's no reason for demand to come back,” Eyler said.
Some sectors, such as manufacturing, may be able to bounce back relatively quickly once shelterinplace orders are lifted, Snaith said.
“If a manufacturing plant was shut down by public health dictate but demand for the product is still there, they’ll turn on the lights and get back to work,” he said.
But many other industries, such as travel and tourism, could remain curtailed by the “fear factor” of a public that’s not ready to eat in restaurants, fly on airplanes and stay in hotels.
“Just because things are open doesn’t mean we’ll go back to the way things were,” he said.
After eight years at Airbnb as a userexperience researcher, Esther Berthon, 30, was among 1,900 people laid off from the shorttermrental company last week.
“It was not a surprise for anyone,” she said. “It had been two months since we started to quarantine. We are a travel company; we all understood business would not be the same.”
She’s appreciative that Airbnb worked hard to smooth the transition, offering generous severance benefits, creating a directory where laidoff employees could post their resumes and LinkedIn profiles, and delivering the news as kindly as possible.
“It’s still sad,” she said. “It was eight years of my life.”
But underscoring that much of the tech industry is relatively unscathed, she’s already receiving an overwhelming number of emails from recruiters.
“It’s reassuring but the situation is very unpredictable,” she said. “I’m going to start looking for a job as soon as possible. I fear if I wait too long, things are going to get worse. I don’t think I have the luxury of taking a break.”
Even while some businesses are allowed to reopen, large office buildings will still remain closed, with most employees working from home. That will continue to undercut the serviceindustry businesses that used to cater to them, such as restaurants and coffee shops, said Sean Randolph, senior director of the Bay Area Council Economic Institute.
“There’s a huge positive flow of benefits from tech employment into nontech employment,” Randolph said.
Some workers may leave for good.
“If you don’t have the jobs here the way you did before but you have high costs, I think it's quite possible that we’ll see some bleeding out of the Bay Area, especially in the middleincome, middleskills area,” Randolph said.
But for many living paycheck to paycheck even before the pandemic, leaving may not be an option.
“There are a large number of people in the service economy who don't have that kind of mobility or skills and who simply aren’t in a position to take up and go to some other state,” Randolph said. “A lot of them will be under the most pressure.”
Some service occupations are hiring, however.
Mathieu Stevenson, CEO of Snagajob, which lists openings for hourly jobs at retailers, restaurants and fastfood places, said the site shows a huge spike in the number of driving, warehouse and logistics job openings in the Bay Area, which were up 279% on May 11 compared with March 2. Grocery store jobs were up 163%.
Even finedining and fastcasual restaurants were advertising openings, albeit far fewer than before shelter in place started.
That’s because newly enhanced unemployment benefits under the Cares Act pandemic relief package include an extra $600 a week, and many people prefer to shelter at home for safety and health reasons, Stevenson said.
“For a fair number of workers, it makes sense to wait things out” until July, he said. Despite recordhigh unemployment, job searches have actually declined. “That’s reflective that people have real concerns working in this environment and fortunately unemployment benefits have been sufficient for many,” he said.