Long-term jobless caught in a squeeze that imperils recovery
WASHINGTON — This spring, Magdalena Valiente was expecting her best year as a Florida-based concert promoter. Now, she wonders if the career she built over three decades is over.
Back in March, Valiente had been busy planning three tours and 42 live events, including concerts for the Panamanian reggaeton star Sech and the Miami Latin pop band Bacilos. Earning well over six figures during good years, Valiente was hoping to help her youngest son, a high school junior, pay his way through college.
But with live events canceled, things have turned bleak. She is relying on unemployment benefits and Medicaid and has applied for food stamps. She has lost hope that the crisis will end soon.
“I worked up from the very bottom when I started in this business in my twenties,” said Valiente, a single mother in Fort Lauderdale. “There weren’t many other women, and it was hard. It’s not easy to let it go.”
Millions of Americans in the industries hit hardest by the viral pandemic face a similar plight. Their unemployment has stretched from weeks into months, and it’s become painfully unclear when, if ever, their jobs will come back. In the entertainment field where Valiente worked and in other sectors that absorbed heavy job losses — from restaurants and hotels to energy, higher education and advertising — employment remains far below pre-pandemic levels.
These trends have raised the specter of a period of widespread long-term unemployment that could turn the viral recession into a more painful, extended downturn. People who have been jobless for six months or longer — one definition of long-term unemployment — typically suffer an erosion of skills and professional networks that makes it harder to find a new job. Many will need training or education to find work with a new company or in a new occupation, which can delay their re-entry into the job market.
On Friday, the government reported that employers added 661,000 jobs in September, normally a healthy gain. Yet it marked the third straight monthly slowdown in hiring. The nation has regained barely half the 22 million jobs that were lost to the pandemic and the widespread business shutdowns it caused in March and April.
In a worrisome trend, a rising proportion of job losses appear to be permanently gone. When the virus erupted in March and paralyzed the economy, nearly 90% of layoffs were considered temporary, and a quick rebound seemed possible. No longer. In September, the number of Americans classified as permanently laid off rose 12% to 3.8 million. And the number of long-term unemployed rose by 781,000 — the largest increase on record — to 2.4 million.
“We have a real chance of there being massive long-term unemployment,” said Till Von Wachter, an economics professor at UCLA.
The nation now has 7% fewer jobs than in February. Yet the damage is far deeper in some sectors. The performing arts and spectator sports category, which includes Valiente’s industry, has lost 47% of its jobs. It hasn’t added any net jobs since the coronavirus struck.
Hotels are down 35%, restaurants and bars 19%, transportation 18%. Advertising, one of the first expenses that companies cut in a downturn, is down 9%.
Higher education has lost 9% of its jobs. Many classes have been delayed or moved online, reducing the need for janitors, cafeteria workers and other administrators. Normally during recessions, the education sector adds jobs to accommodate people returning to school to seek marketable skills or education. Not this time.
Ashley Broshious took years to develop skills that now seem much less in demand. A manager and sommelier at a Charleston restaurant, Broshious is one of just six certified advanced sommeliers in South Carolina. Still, she was laid off in March. And when the restaurant owner reopened one of his two establishments, she wasn’t rehired.
Now, Broshious receives about $326 a week in unemployment benefits. That’s hardly enough to pay the $2,400 monthly rent on her home, as well as student loans, car insurance and credit card debt from a trip to Hawaii she took while still working.
“When you spend your entire life building this career,” Broshious said, “it’s hard to start over.”