Economic Fallout from the Coronavirus Continues to Spread Rapidly

The staggering economic effects of the coronavirus are rapidly increasing, and U.S. workers in a variety of industries—from casinos and bars to airlines and cruise ships—are feeling the economic pressure.

The staggering economic effects of the coronavirus are rapidly increasing, and U.S. workers in a variety of industries—from casinos and bars to airlines and cruise ships—are feeling the economic pressure.
(duncan c / Creative Commons)

Looming Economic Recession

The Dow Jones plummeted on Monday, marking its worst fall ever and Wall Street’s worst showing since 1987’s Black Monday.

That same day, UCLA revised an economic forecast issued just last week that predicted a looming recession.

In its revised version, UCLA Anderson Forecast announced the economy has already stopped growing and will likely stay that way through the end of September.

Major Cities Declare Shelter in Place Orders and Lockdowns

Following the lead of several Bay Area counties, including San Francisco and Oakland, New York City Mayor Bill de Blasio announced Tuesday that the city is considering a shelter in place order—essentially requiring the city’s residents to stay home and restrict outside social contact to essential trips only.

“I don’t take this lightly at all,” de Blasio said. “Folks have to understand that right now, with so many New Yorkers losing employment, losing paychecks, dealing with all sorts of stresses and strains, I’m hearing constantly from people who are tremendously worried about how they’re going to make ends meet. … A shelter-in-place begs a lot of questions. What is going to happen with folks who have no money?”

(New York Gov. Andrew Cuomo has since declared that de Blasio lacks authority to implement such a policy.)

San Francisco Mayor London Breed also announced on Monday that the city will cover the costs for five additional sick days for workers in the private-sector affected by COVID-19.

“Public health comes first in this crisis, but we know that many people have less flexibility to stay home and keep paying their rent if they do get sick,” Breed said. “We want everyone to know that staying home to take care of themselves and their families is the most important thing they can do, not only for their own health but also to slow the spread of this virus in our community.”

In Southern California, LA city officials have also implemented emergency restrictions, like the closing of all bars, fitness centers and movie theaters, and eliminating the dine-in option at restaurants—with other cities like El Paso, Austin, Dallas, Houston and Miami following suit.

Massive Layoffs in Restaurants, Casinos, Hotels and Other Affected Industries

Officials in places like California, Illinois, Massachusetts, Ohio, Washington and New York City have forced eateries and bars to stay closed at least until the end of March.

And although many restaurants around the country are still offering takeout and delivery, the sudden massive loss of dine-in business leaves restaurant owners with little options but staff cuts.

Of the approximately 4 million U.S. restaurant workers and bartenders, 71 percent and 56 percent are women, respectively. These employees must now cope with impending layoffs in order for their employers to cut costs and keep restaurants afloat in the long-term.

Workers in the travel and tourism industry are also already being laid off. For example, Marriott, the world’s largest hotel company, announced its plans to furlough tens of thousands of employees as it the company increases hotel closings worldwide.

Women workers will particularly feel the effects of these continuous, inevitable layoffs, as the hotel industry is disproportionately made up of women workers: 90 percent of housekeepers and 66 percent of front desk clerks.

Workers Must Feel the Effects of Bailout Packages for Industries Affected by COVID-19

In addition an $8.3 billion package passed earlier this month focused on the public health care system, and the House’s passage late last week of a bill including increased paid sick leave allowances, unemployment insurance and an expansion of food stamps, the Trump administration is now calling for an economic stimulus package to the tune of $850 billion to halt the financial free-fall caused by COVID-19.

Airlines

One industry being strongly considered for a bailout is the airline industry.

Every single airline has announced significant service reductions. The BBC reports:

Virgin Atlantic will cut four-fifths of its flights and has asked staff to take eight weeks of unpaid leave.

Ryanair and EasyJet are grounding most of their fleets, while BA owner IAG is to cut capacity by 75 percent.

Norwegian Air has cancelled thousands of flights and will temporarily lay off more than 7,500 staff.

Holiday company Tui has said it will suspend the “majority” of its operations, affecting “package travel, cruises and hotel” bookings.

Passenger numbers and bookings have plummeted in recent weeks as countries closed their borders and holiday makers cancelled trips.

As government considers relief to the airline industry, union workers including mechanics and flight attendants want to make sure that relief monies will trickle down to the actual workers and not stay in the coffers of the company.

“Absent payroll subsidies, mass layoffs and furloughs are inevitable,” said Sara Nelson, president of the Association of Flight Attendants. “This will have long-term consequences because nearly all aviation-related workers have to pass background checks and security and safety training requirements. If these lapse or people need to be rehired, it will slow aviation’s return to service. If airlines are slow to recover, other industries will be too.”

In a thread on Twitter, Nelson called for the need for airlines to provide direct payroll subsidies to all industry workers—not just flight attendants and pilots but “anyone who touches aviation.”

Cruise Lines

Bailout talks are ramping up for cruise lines as well, as these companies take a deep dive in the midst of the pandemic, prompting some experts to call it the “the biggest challenge facing the cruise companies since 9/11.”

The Guardian reports:

One by one, the big cruise operators announced they were halting operations and mothballing ships, beginning with Princess Cruises, one of Port Everglades’ biggest clients with 18 vessels, Viking Cruises and Disney Cruise Lines on Thursday. Others had fallen into line by Saturday morning. Normally bustling ports including Miami, Port Canaveral, Galveston, New York, Seattle and New Orleans went silent for the first time since the days following 9/11.

The value of the three biggest US cruise lines, Carnival, Royal Caribbean and Norwegian, has continued to tumble on Wall Street to the point of “flat-out ridiculous”, according to market analyst Rick Munarriz of the Motley Fool.

On Thursday shares of Miami-based Carnival Cruise Lines, owners of Princess, plummeted more than 31%, two days after Royal Caribbean withdrew its own market predictions and rearranged finances to increase liquidity by half a billion dollars. Reports of layoffs of port workers, cruise line contractors and crew, and hotel workers came in thick and fast.

Casinos

Nevada Gov. Steve Sisolak ordered a 30-day freeze on gambling—shutting down casino resorts and slot and cutting off an industry that fuels the state’s tourism and hospitality-powered economy.

“This is effecting the lives of our citizens. People are dying. Every day that is delayed here, I’m losing a dozen people on the back end that are going to die as a result of this,” Sisolak said at a news conference Tuesday night.

These closures are prompting massive layoffs in this industry as well.

The Las Vegas Review Journal reports:

MGM Resorts International has begun significant furloughs and layoffs. In addition to the previously announced two weeks of pay for furloughed full-time employees, the company is including part-time hourly employees. MGM said Tuesday it is also paying benefits for all eligible employees enrolled in MGM Resorts health plans through June 30.

Caesars Entertainment Corp. has begun laying off employees. Caesars was “unable to make a determination as to whether the layoff will be temporary or permanent.” Caesars said it would ensure employees are “paid all earned wages and agreed upon benefits” at the time of their termination.

Sahara Las Vegas laid off a number of employees Monday. A company spokeswoman said team members will be able to keep their benefits, and the company will absorb the costs. The company will “continue to evaluate the business and make operational adjustments as necessary, with the hope of returning team members to work once these challenges have passed,” according to the statement.

About

Roxy Szal is the associate digital editor at Ms.