As virus surges back, so might more layoffs
A resurgence of confirmed COVID cases across the South and West is endangering hopes for an economic rebound in the region.
The reopening of Tucson’s historic Hotel Congress lasted less than a month.
General manager Todd Hanley on June 4 ended a twomonth coronavirus lockdown and reopened the 39-room hotel at half-capacity, along with an adjoining restaurant for outdoor dining. Yet with reported COVID19 cases spiking across Arizona, Hanley made the painful decision last weekend to give up, for now.
“We are closing everything,” he said. “We are going to live to fight another day.”
The move means that once again, most of Hanley’s employees will lose their jobs, at least temporarily. Except for roughly a dozen who are needed to maintain the century-old property, more than 50 workers he had recalled will be laid off for a second time.
A resurgence of confirmed COVID cases across the South and West — and the suspension or reversal of re-openings of bars, hotels, restaurants and other businesses — is endangering hopes for an economic rebound in the region and perhaps nationally. At stake are the jobs of millions who have clung to hopes that their layoffs from widespread business shutdowns this spring would prove short-lived.
On Thursday, the government is expected to issue another robust monthly jobs report. Economists have forecast that employers added 3 million jobs in June, on top of 2.5 million added in May, clawing back a portion of the record-high 21 million that vanished in April at the height of the viral shutdowns.
Yet any such news might already be outdated: The jobs report won’t fully capture the impact of the COVID upsurge in the South and West and the desperate steps being pursued to try to control it.
“We’re still in a very deep hole,” said Diane Swonk, chief economist at the firm Grant Thornton. “This makes the June employment report backward-looking instead of forward-looking.”
Eager to jump-start their economies, governors in several states across the Sun Belt had lifted their lockdowns before their states had met reopening guidelines that were set — yet largely shrugged off — by the White House.
Reported infections quickly spiked.
The governors began to backtrack. Texas Gov. Greg Abbott last week ordered all bars closed. Arizona Gov. Doug Ducey told residents to stay home and declared that the state was “on pause” as the COVID cases stacked up. Florida also banned alcohol consumption at its bars.
Kylie Davis, a 23-year-old bartender in Tampa, Florida, had returned to work May 23 after two months without a job, struggling to collect unemployment benefits from Florida’s backlogged system. The tips, she said, were good.
“People were so understanding,” she said, “that we had been out of work for a while and were extremely generous.”
Yet after a few weeks, Davis was coughing and exhausted and had lost her sense of taste and smell.
On June 12, she tested positive for the virus and couldn’t return to work when Florida bars reopened. Neither, it turns out, could many others.