Many Jobs May Vanish Forever as Layoffs Mount

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Even as states begin to reopen for business, a further 2.4 million workers joined the nation’s unemployment rolls last week, and there is growing concern among economists that many of the lost jobs are gone for good.

The Labor Department’s report of new jobless claims, released Thursday, brought the total to 38.6 million since mid-March, when the coronavirus outbreak forced widespread shutdowns.

While workers and their employers have expressed optimism that most of the joblessness will be temporary, many who are studying the pandemic’s impact are increasingly worried about the employment situation.

“I hate to say it, but this is going to take longer and look grimmer than we thought,” Nicholas Bloom, an economist at Stanford University, said of the path to recovery.

Mr. Bloom is a co-author of an analysis that estimates 42 percent of recent layoffs will result in permanent job loss.

The precariousness of the path ahead was underscored Thursday by the Federal Reserve chair, Jerome H. Powell. “We are now experiencing a whole new level of uncertainty, as questions only the virus can answer complicate the outlook,” he said in remarks for delivery at an online forum.

The economy that does come back is likely to look quite different from the one that closed. If social distancing rules become the new normal, causing thinner crowds in restaurants, theaters and stores, at sports arenas, and on airplanes, then fewer workers will be required.

Large companies already expect more of their workers to continue to work remotely and say they plan to reduce their real estate footprint, which will reduce the foot traffic that feeds nearby restaurants, shops, nail salons and other businesses.

Concerns about working in close quarters and too much social interaction could also accelerate the trend toward automation, some economists say.

New jobs are being created, mostly at low wages — for delivery drivers, warehouse workers and cleaners. But many more jobs will vanish.

“I think we’re in for a very long haul,” Mr. Bloom at Stanford said.

Torsten Slok, chief economist for Deutsche Bank Securities, agreed that the government’s latest report pointed to lasting job losses. Even with states reopening, “the hemorrhaging has continued,” he said.

“I fear that maybe there is something more fundamental going on,” particularly in occupations most affected by social distancing rules, Mr. Slok added. He expects the official jobless rate for May to approach 20 percent, up from the 14.7 percent reported by the Labor Department for April.

A household survey from the Census Bureau released Wednesday offered further evidence of the widespread pain: 47 percent of adults said they or a member of their household had lost employment income since mid-March. Nearly 40 percent expected the loss to continue over the next four weeks.

Nonetheless, Larry Kudlow, director of the National Economic Council, knocked down the idea of extending unemployment benefits. “I do not believe that more government spending is going to give us a strong and durable recovery,” he said Thursday at an event sponsored by The Washington Post.

Emergency relief and expanded unemployment benefits that Congress approved in late March have helped tide households over. Roughly three-quarters of people who are eligible for a $1,200 stimulus payment from the federal government have received it, according to the Treasury Department.

Workers who have successfully applied for unemployment benefits are getting the extra $600 weekly supplement from the federal government, and most states have finally begun to carry out the Pandemic Unemployment Assistance program, which extends benefits to freelancers, self-employed workers and others who don’t routinely qualify. The total number of new pandemic insurance claims reported, though, was inflated by nearly a million because of a data entry mistake from Massachusetts, according to the state’s Executive Office of Labor and Workforce Development.

Mistakes, lags in reporting and processing, and the weeding out of duplicate claims and reports have clouded the unemployment picture in some places.

What is clear, though, is that many states are still struggling to keep up with the overwhelming demand, drawing desperate complaints from jobless workers who have been waiting two months or more to receive their first benefit check. Indiana, Wyoming, Hawaii and Missouri are among the states with large backlogs of incompletely processed claims. Another is Kentucky, where nearly one in three workers are unemployed.

Sami Adamson, a freelance scenic artist for theater, events and television shows, received the letter with her login credentials to collect benefits from New Jersey only on Monday, more than two months after she first applied.

She said her partner, who is in the same line of work, had filed for jobless benefits in New York and quickly received his payments.

By the time Ms. Adamson heard from New Jersey, a design studio had called her for a temporary assignment. She plans to eventually reclaim the lost weeks of benefits, but for now she is helping to make face shields in a large warehouse where assembly-line workers are spaced apart, handling plastic, foam and elastic.

“I don’t think I’ll need aid for the next two or three weeks,” Ms. Adamson said, “but I’m not sure too far ahead of that.”

Nearly half of the states have yet to provide the additional 13 weeks of unemployment insurance that the federal government has promised to those who exhausted their state benefits. Workers in Florida — which provides just 12 weeks of benefits, the fewest anywhere — are particularly feeling this pinch. And while several states, including those that pay the average of 26 weeks, have offered additional weeks of coverage during the pandemic, Florida has not.

Small-business owners who were hoping the Paycheck Protection Program would enable them to keep their workers on the payroll contend the program is not operating as intended.

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