● White-collar workers feeling the economic bite,
Nick Castillo had just begun a job as a sales manager at an equipment distributor in South Florida. His salary was $70,000 a year plus commissions.
“Working there was fantastic,” said Castillo, 31, who also holds an MBA. “The bosses, the ownership group, everyone.”
As bad as things were getting in the outside world, Castillo says, the layoff notice he received two weeks ago was still unexpected. “I was very surprised, sad, maybe a little angry,” he said. “I have a 3-year-old son and a mortgage...I had thought sales were OK.”
Castillo is among the tens of thousands Florida workers who are now without a job. But while much of the focus from the current economic crisis has been on the decimated retail and hospitality industries, white-collar workers like Jimenez are also facing layoffs.
“Just as we saw with the 2008 Recession, job losses will cut across most industry sectors and occupations,” said Ned Murray, associate director of FIU’s Perez Metropolitan Center, in an email. “While many occupations in these sectors are low wage, these are big industry sectors employing many professionals as well.”
While-collar workers — in sales, technology, administration and other jobs — now comprise about 54 percent of the U.S. economy, or about 80 million positions, according to a Washington Post analysis.
“The impact of white collar layoffs should be less severe than consumer facing service sector jobs, but given how much economic output and consumer spending are falling right now, it is very unlikely that white collar employment makes it through this crisis unscathed,” said Abbey Omodunbi, an economist with The PNC Financial Services Grocup, in an email. “So I’d expect fewer but still some job losses. The longer the crisis goes on the more job losses and the wider they will be spread among different categories of employment.”
And while such workers may be less economically vulnerable in the short run, they typically contribute a greater share to the overall economy than blue-collar workers. When those higherpaid jobs are cut, consumer spending takes a hit.
Among those caught in that wider net is Lisa Wright, 56, who worked as a software consultant on a temporary contract for one of Miami’s largest hospitality companies. Wright and hundreds of other contractors were laid off en masse via a web conference call.
The news came as a shock given the scale of the project she had been working on. She considers herself luckier than many others: She supports only herself, and says she has enough of a financial cushion to get her through the short-term. She is optimistic that her experience should allow her to pick up new work—although she said one local company that she had planned to interview with canceled the appointment at the last minute, saying it was pausing its planned project.
“There’s so much uncertainty, in all businesses,” she said. She declined to state her earnings but said she was operating at a senior level.
To retain her cash, she accepted offers to defer payments on her new house in Broward as well as a car payment. And she fears that if the crisis drags on, she will have to dip into her retirement funds.
Mark Muro, senior fellow and policy director at thinktank Brookings Institution’s Metropolitan Policy Program, warns that the labor market may not pick up even after the immediate crisis passes. That’s because technology adoption accelerates in business down-cycles, he said. “It’s almost an [economic] law,” he said.
And with the advent of artificial technology, an increasing number of white collar professions — like human resources, marketing, and finance — likely are going to be replaced by software, he said.
“This is going to be a major assault on the bottom line of companies, who are then going to find that technology is much cheaper than people,” Muro said.
Kristen Elle Solorzano, a public relations professional, was laid off from an allinclusive hotel chain where she was earning $43,000 per year. She started at the company in January, pitching stories to journalists and managing social media. “Due to the coronavirus, the company has lost millions of dollars and decided to let go of 50% of the staff, myself included,” said Solorzano, 24.
She quickly took to social media to ask around about jobs, describing her skills on Facebook groups, which include a degree from the University of Florida and a certificate from Harvard. But more than 10 days after her post, Solorzano still hasn’t found work. And she has other worries to think about, too: “I have three young step sisters, which I help support, as well as my dad and stepmom. I’m looking for contract work, freelance jobs in marketing and social media — anything in my field. The problem is that nobody is hiring right now.”
Castillo, the sales manager, considers himself lucky: His wife works as a nurse, so there is still money coming in to help support their 3year-old son. But he also they also have a $2,000 mortgage to pay. Castillo estimates he can get by for two more weeks. He’s already applied for unemployment, and doubts he’ll be able to find a job before the first check comes in.
“Unfortunately that money is going to be clutch,” he said.