For Hayden Peeler, a 28-year-old mother of two, the prospect of getting coronavirus is the least of her concerns.
A Movie Tavern server outside of New Orleans, Ms. Peeler recently quit a second job at a Trader Joe’s supermarket because it paid less than the theater and didn’t make economic sense with a 60-mile roundtrip commute.
In the face of the contagious virus sweeping the country, the Milwaukee-based company that owns Movie Tavern and Marcus Theaters joined even bigger movie house companies such as AMC Theaters and Regal Cinemas, and by Wednesday morning had closed all 91 of its locations across 17 states.
“The only thing making me feel a little bit less concerned is I have some tax refund left that I was going to use to pay bills,” Ms. Peeler said. “Now, I’m afraid I will go even more in debt and for another year I’ll probably be behind.”
Though it is small consolation to her or her children, Ms. Peeler is far from alone amid growing signs the virus that started in Wuhan, China, will hammer the American economy.
In January, 35% of Americans surveyed by the online financial site FinanceBuzz.com said they had zero retirement savings.
A report by the Federal Reserve in May 2019 found that 40% of Americans could not cover a $400 emergency expense.
Without quick action, the Trump administration has warned the unemployment rate could hit 20%. That catastrophic figure would reverse what has been record employment during the Trump administration across all sectors of society, including the lowest African-American unemployment rate in U.S. history.
All that’s over, and like the track of the virus itself, it may worsen before it improves.
As of March 14, some form of layoffs or reduction in hours had affected 18% of U.S. households, according to a new poll by NPR/PBS NewsHour/Marist.
Another poll released Wednesday by the Pew Research Center showed that 34% of Americans view the coronavirus as a major threat to their finances.
The leisure and hospitality industry has been hit especially hard, with restaurants and bars reduced to carry out or delivery service in many areas. Travel has been reduced to a trickle, decimating hotels and airlines as the outbreak shuts down sports, amusement parks, casinos, museums, movie theaters and other entertainment venues.
More than 3,400 jobs have been lost in the sector and the total could reach as high as 9 million before the health emergency ends, according to recent projections from Challenger, Gray and Christmas Inc.
Those figures do not include “layoffs from bars and restaurants that were shut down across 13 states, the city of St. Louis, Reno NV., and the District of Columbia: PA, NC, IL, NY, WA, MD, CT, MI, CA, MA, NJ, OH, FL (bars and nightclubs),” the company said Wednesday.
“Many establishments would like for their teams to return to work as soon as possible or otherwise keep them employed,” said Andy Challenger, a Challenger, Gray & Christmas senior vice president. “Indeed, some bars and restaurants with delivery services may be able to keep some staff.
“However, with no income, many of these workers will likely seek, and hopefully find, other employment in the interim,” Mr. Challenger said. “If the shutdowns continue even longer, many of these jobs may not exist immediately when the crisis ends.”
Outside the hospitality and entertainment sectors, coronavirus does not seem to have felled nearly as many employees, although the overall employment scene is grim.
“It’s carnage,” said David Morgan, a founder of Morgan Stampfl Inc. a headhunting firm in New York City’s finance world. “The banks haven’t really been hit but if this keeps up, who knows, and the numbers Thursday — nobody wants to see that.”
The Department of Labor is scheduled to release its weekly jobless claims report Thursday. While that report will show claims through last Saturday, anecdotal data since then paints a dire picture. Thousands of unemployment applicants have flooded the system in New Jersey, Ohio and Connecticut.
In Connecticut, roughly 10,000 new unemployment applicants file each day each day, according to the state’s Department of Labor.
In Ohio, more than 48,000 people applied for jobless benefits during the first two days of this week, compared with just 1,825 during the same period the week before. In Pennsylvania, about 70,000 people sought unemployment aid in a one day, six times the total for the entire previous week, the Associated Press reported.
The crush has been so great that unemployment application websites have crashed in New York, Kentucky and Oregon, according to local reports.
On an emergency call with clients this week, Wall Street giant Goldman Sachs reportedly told clients it did not foresee a structural crisis with the nation’s economy and banking system, comparing the situation more to the Sept. 11, 2001, terrorist attacks than the 2008 financial meltdown.
Companies have announced different ways in which they hope to cope with the slowdown. Taco Bell, for example, has vowed to keep paying its employees, while the CEO of Delta Airlines said he will forego six months of paychecks in an effort to avoid layoffs.
Tens of thousands of employees at Marriott International, the world’s largest hotel chain with more than 130,000 workers worldwide, started receiving furlough notices this week. Company spokespeople have said the furloughs will be without pay although health insurance for employees remains in force.
Textron Aviation, which makes Cessna and Beechcraft airplanes, announced staggered furloughs Wednesday that company spokespeople told CNBC would apply to “most” of its 12,000 workers by May 29.
For Ms. Peeler and the other 4,500-odd employees of Marcus Theaters, the bad news has been somewhat softened by news pay would not stop completely and by frequent corporate communications.
In emails to employees, the company has said it will pay those who averaged 15 hours or more a week up to $398 a week for the first two weeks, although the shutdown’s end remains to be determined and experts are predicting many businesses may be closed for longer periods than that.
“Honestly, I think they’ve been pretty good about keeping us in the loop about what is happening,” Ms. Peeler said.
Some business giants are trying to help. Amazon Inc., which announced it would hire 100,000 workers at $17 an hour to deal with a surge in online orders, also announced Wednesday it would provide $1 million “for grants to nonprofits addressing food insecurity, shelter and providing emergency financial assistance,” in the Washington, D.C., area.
States have eased unemployment restrictions in some cases. The Department of Labor notes a number of ways people can qualify for unemployment insurance with COVID-19: “An employer temporarily ceases operations due to COVID-19, preventing employees from coming to work; An individual is quarantined with the expectation of returning to work after the quarantine is over; and An individual leaves employment due to a risk of exposure or infection or to care for a family member.”
Many of those applying for unemployment do not come from jobs that provide pensions, and 401(k) accounts have taken enormous hits with the market dive.
Financial experts have been warning for years that Americans save too little, and with the market plunge and mass layoffs expected, U.S. workers may pay the price for their infamous failure to save.
Ms. Peeler declined to detail her overall financial picture but said it was far from solid.
“Like others living paycheck to paycheck, this situation has me really concerned,” she said.