Workers being laid off twice as COVID ripples through economy

Madi Portes knows she won’t have a job after November 1. She’s just waiting for the phone call from headquarters to tell her it’s official.

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Portes is one of more than 8,000 part-time workers at Walt Disney World who learned last month their jobs would be cut. The entertainment company is laying off 28,000 theme park workers nationwide as it faces reduced traffic for the foreseeable future.

Disney “was supposed to be my last stop,” Portes said. Now, “Anytime I see a 407 number I won’t pick up, I get so scared because I know I’m going to start crying,” she said, referring to the area code in Orlando, Florida. 

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Portes, 61, started at Disney as a costumed cast member five years ago, after a long career as a legal assistant in the New York area. She soon worked her way up to being a trainer and coordinator before moving to the vacation-planning department. Disney furloughed her in April, along with most other workers, and she was not brought back for its limited reopening in July.

“I’m part-time and I’m a vacation planner, and who’s buying tickets? Nobody,” Portes said.

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Madi Portes speaks with CBS MoneyWatch from her home in Florida via Zoom shortly after she learned her job at Disney World was cut.

She’s eligible for a small severance payment, and she’s in line for her old job until 2022 before Disney hires any new workers, according to terms the company reached with the Service Trades Council union, which represents its Orlando theme park workers. But she’s unsure when the hospitality industry will hire again.

“It stung,” Portes said. “Not only because I’m losing my job, my education, but because it’s happening to Disney. It’s a powerhouse. If a powerhouse is being thrown under the bus, what is happening to everyone else?”

The second wave is here

Eight months after the coronavirus first struck the U.S. economy, Americans are still being laid off en masse. In addition to Disney, U.S. airlines began furloughing 45,000 workers this month. Retailers including Kohl’s, Ralph Lauren and the mall operator Brookfield Properties have all announced cuts to their corporate workforces. MGM Resorts laid off 18,000 people last month. Allstate insurance cut nearly 4,000 jobs this month. 

“We already are experiencing a second wave of layoffs,” said Danielle Goldfarb, head of research at the polling company RIWI, which specializes in tracking and predicting trends.

A high number of these are repeat layoffs, Goldfarb said. A survey from RIWI and Cornell University released last month found that, among an estimated 36 million workers called back to their jobs after a layoff this year, 27% have been laid off again, while another 36% were told they could still be laid off again.

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Airline furloughs could deal blow to economy 02:29

“There were a number of Americans put back on payroll when we saw there was some reopening taking place. Many of those people were then laid off again, or were on payroll but not actually working,” Goldfarb noted.

“If you think you’re being temporarily laid off until Covid-19 gets under control — that’s what a lot of people saw at the beginning — if you get put back on payroll again and laid off again, that has a really dampening effect on your confidence.”

Denied benefits the second time around

For some workers, a second layoff can jeopardize their unemployment benefits the second time around. Maegan Dean, a 26-year-old beauty salon worker, had no issues receiving unemployment benefits this spring when her employer in Nashville, Tennessee, was closed.

Dean went back to work in June. After two weekends, she called her job to say she’d miss a shift to take her dog to the hospital, and was laid off again shortly after, she told CBS MoneyWatch. Dean said she has about $4,000 remaining on an unemployment claim, but hasn’t been able to access it or speak with the Tennessee workforce development department for answers.

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Maegan Dean, 26, said she’s been unable to access her Tennessee unemployment benefits since her second layoff in July. / Credit: Maegan Dean

“I’ve called multiple times, multiple times a day, and I haven’t been able to get on the phone since June,” she said. “I resend the same email every day, asking for help, and I call and leave one voice mail. My first message was left four months ago.”

Dean is staying with relatives in California and looking for new work, although her options are limited, she said, because she has an autoimmune disorder and is at high risk if she contracts Covid, she said. She wants to move permanently, but says she doesn’t have enough money to do so.

“I feel like a burden. But I don’t feel safe to work,” she said. “I honestly don’t know how other people are surviving.”

Saved by a government loan, then cut

The Paycheck Protection Program, passed this spring, did succeed in keeping millions of workers in hard-hit industries on payrolls even when their employers closed. Many of the stores, casinos and restaurants that took out these PPP loans are seeing those funds end while customers are nowhere to be found.

Scott Sacker, a 52-year-old casino dealer living in Santa Fe, New Mexico, found out at the start of October that he would be laid off, after five years at his job.

“It was a little bewildering,” he told CBS MoneyWatch. “It feels completely arbitrary.”

The casino had closed in mid-March, but Sacker kept drawing his paycheck thanks to a PPP loan. In mid-July, when the money ran out, he was put on furlough and started receiving unemployment, including three weeks’ worth of a supplemental $600 from the federal government, and an extra $300 emergency supplement for five weeks after. Now, he’s acutely aware that his benefits will expire in 14 weeks — and sooner if he doesn’t prove he’s applying for work.

“It’s going to be a challenge because of the economy,” he said. “I have really minimal experience in anything else besides hospitality. Those industries are in pretty bad shape right now.”

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Scott Sacker, 52, has spent most of his life in the hospitality field. SInce being laid off from his casino job, he hopes to make money investing or find work as a videographer:

During the New Mexico casino’s busiest times, Sacker estimates he earned $20 to $25 an hour, including tips. Since it closed, Sacker has hustled to try to build a financial cushion for himself. It has been a struggle.

He’s contacted a prior employer in Florida who ran event promotions, only to be told that events likely wouldn’t happen until next year. He turned to eBay to get rid of inventory he had from a defunct business, which he estimates netted him about $3,000 over six months. He started a website about cryptocurrency trading and built up a cryptocurrency portfolio, in the hopes that one of those projects will eventually earn a profit. After teaching himself how to fly a drone, he answered some Craigslist job listings looking for camera operators. Last week he interviewed for a job producing an independent radio and TV show. He said he was hopeful about the job, even though it doesn’t come with a paycheck.

“There’s no money involved up front, but they say the money will come,” Sacker said.

Still, he prefers this route to looking for work in the ailing hospitality industry, he said. “The last thing I want to do is look for a $12-an-hour job.”

Added instability

Hospitality and food-service jobs were notoriously unstable even before the pandemic, with annual turnover at some establishments approaching 100%. But with many of those jobs now gone, and hiring severely depressed, many laid-off workers are finding themselves looking — again — at unemployment.

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Jobless claims increased last week 06:22

Of the more than 800,000 new unemployment claims each week, up to one-third are coming from workers who’ve applied for benefits within the past year, according to Andrew Stettner, a senior fellow at the Century Foundation. That’s more than double the rate seen during the winter.

Goldfarb fears that layoffs will increase as businesses’ PPP loans run out, along with their requirements to keep workers on staff. Joblessness will only escalate unless the federal government injects more money into the economy, she warned.

“If there is no work to be done, if you don’t have customers and no longer have stimulus funding, this is when we’re going to see the impact,” she said. “This could be a leading indicator of what’s to come if there isn’t any other stimulus.”