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Layoffs rise as pandemic subsides

By Masao Suzuki |
February 19, 2021
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San José, CA - Even as the COVID-19 pandemic continued to subside during mid-February, layoffs were on the rise, showing that we are nowhere near the end of the tunnel for workers in this country. For the week ending February 13, the U.S. Department of Labor reported that there were 861,000 new applications for regular state unemployment insurance, an increase of 13,000 over the previous week. Applications for the federal Pandemic Unemployment Assistance program for gig workers and the self-employed rose by a much larger 174,427 the same week, to 516,299 new claims. Together, this meant that almost 190,000 working people had to file for government aid because of layoffs and business closures.

Even worse, the previous week’s claim number for regular state UI was revised upward by 68,000. These weekly new claims numbers were four times higher than the number a year ago, before the economic crisis started. The total number for all programs - including the state UI, the federal PUA, as well as the new programs for those who have been out of work for more than six months, the state Extended Benefits, and the Federal Pandemic Emergency Unemployment Compensation or PEUC - is nine times the pre-recession totals of a year ago.

While the stock market has been hitting new highs and corporate profits are near record levels, the job market is still down almost 10 million jobs from a year ago. Most economists think that the total production of goods and services, measured by the Gross Domestic Product or GDP, will recover their pre-recession levels this year. But the recovery in the job market won’t be until at least 2022, given that the number of new jobs has basically stalled in December and January, which, when averaged together had a monthly job loss of about 90,000.

Even worse, projections are that millions of jobs are not coming back. The recession and pandemic have speeded up the use of new technologies that can eliminate jobs. 20% or more of office jobs may continue to be work at home, which will cause losses in downtown food service and retail jobs. At least 20% of business travel is projected to be lost as videoconferencing continues, again leading to permanent hotel, restaurant and travel related jobs gone. Many retail jobs are not coming back even when COVID-19 loses its pandemic status, as a lot of online shopping is here to stay.

One might think that this will just shift jobs from stores to warehouses and fulfillment centers. But warehousing jobs, which grew dramatically during the pandemic with the explosion of online shopping, is also under threat with growing automation. Chewy, a pet supply online retailer, just opened a new fulfillment center that uses only one-third the workers of a traditional warehouse. Amazon has also been stepping up the use of robots in their warehouses. These robots are bound to spread across the whole warehousing and shipping industry, reducing the number of jobs.

This is one of the features of recessions in a capitalist economy - that it speeds up technological and job changes that were already underway. And unless there are strong labor unions and a fighting workers’ movement, the average worker will get the short end of the stick while corporations and their owners win.