As pandemic surges, US employers cut back on hiring, pressure mounts for Congress to pass relief package

As pandemic surges, US employers cut back on hiring, pressure mounts for Congress to pass relief package

A worker wearing a mask to protect against coronavirus waits for a client at a state unemployment office in Mississippi in April during the first surge of the coronavirus. The fall resurgence has seen employers cut back on hiring, though hopes are rising for a new relief package being passed by Congress. | AP file

With the job market and economy faltering in the face of a virus that’s shattering daily records, optimism is building in Washington for bill that would offer relief for businesses, the unemployed, schools, and health care providers.

WASHINGTON — With the viral pandemic accelerating across the country, America’s employers sharply scaled back hiring last month, adding 245,000 jobs, the fewest since April and the fifth straight monthly slowdown.

At the same time, the unemployment rate fell to a still-high 6.7%, from 6.9% in October as many people stopped looking for work and were no longer counted as unemployed, the Labor Department said. November’s job gain was down drastically from a 610,000 gain in October.

Friday’s report provided the latest evidence that the job market and economy are faltering in the face of a virus that has been shattering daily records for confirmed infections. Economic activity is likely to slow further with health officials warning against all but essential travel and states and cities limiting gatherings, restricting restaurant dining and reducing the hours and capacity of bars, stores and other businesses.

In Congress, meanwhile, optimism is finally building for a COVID-19 aid bill. It would offer relief for businesses, the unemployed, schools, and health care providers, among others struggling as caseloads spike.

House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell have initiated late-game negotiations in hopes of combining a relief package of, in all likelihood, less than $1 trillion with a separate $1.4 trillion governmentwide omnibus spending bill. The duo were the architects of the $1.8 trillion CARES Act, the landmark relief bill passed in March.

Most experts say the economy and job market won’t be able to fully recover until the virus can be controlled with an effective and widely used vaccine. And the picture could worsen before it improves.

“The recovery is not insulated from the effects of the pandemic,” said Daniel Zhao, senior economist at employment website Glassdoor. “This is the calm before the storm. We face a long and difficult winter ahead.”

The jobs slowdown comes as two enhanced federal unemployment benefit programs are set to expire near the end of this month — and just as viral cases are surging and colder weather is shutting down outdoor dining and many public events. Unless Congress enacts another aid package, more than 9 million unemployed people will be left without any jobless aid, state or federal, beginning after Christmas.

Friday in Wilmington, Delaware, President-elect Joe Biden said the jobs report was “grim” and “shows an economy that is stalling.” Biden urged Congress to act quickly.

Before the pandemic, last month’s job gain would have been considered healthy. But the U.S. economy is still nearly 10 million jobs below its pre-pandemic level, with a rising proportion of the unemployed describing their jobs as gone for good. Faster hiring is needed to ensure people laid off during this spring can quickly get back to work.

There is also evidence the pandemic is inflicting long-term damage on millions of workers. People who have been out of work for six months or more — one definition of long-term unemployment — now make up nearly 40% of the jobless, the highest such proportion in nearly seven years. The long-term unemployed typically face a harder time finding new jobs.

And the proportion of Americans either working or seeking work fell in November, suggesting that many people soured on their prospects for finding a job and stopped looking. That proportion declined to 61.5%, a level that before the pandemic hadn’t been seen since the 1970s.

In Columbus, Ohio, Agnes Makokha is unemployed and receiving jobless benefits for the first time in her life. Makokha, 45, lost her job as a human resources administrator nearly a year ago, well before the pandemic struck. Yet since the virus intensified, it’s become much harder for her to find work.

Makokha doesn’t have a car. And in April, bus service on her route was temporarily canceled. She struggled to buy groceries, much less look for work. Since then, Makokha has been scraping by with the help of food pantries and unemployment benefits. But those benefits are set to run out Dec. 26.

“I am a little bit scared now about the help coming to an end because I’m not quite sure what’s going to happen,” Makokha said. “If McDonald’s will hire me, I will take that job. If anyone will hire me, I would take the job.”

The consequences of the slowdown are uneven. Low-wage industries, like restaurants and bars and retail stores, actually cut jobs last month. And many mothers have been forced to stop working to take care of children that are in school online.

The unemployment rates for Black and Latino workers fell much more last month than for whites. Still, the Black unemployment rate was 10.3% and for Latinos 8.4%, compared with 5.9% for whites.

Friday’s jobs report also reflects how the coronavirus has transformed holiday shopping. Transportation and warehousing firms added 145,000 jobs in November, more than half the total job gain for the month. That trend reflected rapid hiring by shipping and logistics firms benefiting from surging online purchases by consumers shopping at home. That was the biggest monthly job gain for that industry on records dating back to 1972.

Retailers, by contrast, shed 35,000 jobs — a reflection of fewer consumers shopping in stores.

U.S. deaths from the coronavirus topped 2,800 Thursday, a new high, with more than 100,000 Americans hospitalized with the disease, also a record, and new daily cases topping 200,000. In response, at least 12 states have imposed new restrictions on businesses in the past month, according to an Associated Press tally.

Jon Tigges, who owns a bed-and-breakfast and wedding venue near Leesburg, Virginia, has lost about two-thirds of his normal wedding events this year, dealing a sharp blow to his bottom line. Out of about 35 part-time workers Tigges had employed before the pandemic, just a handful are likely to work on any given weekend.

“We’re hoping there will be another relief bill — I need another loan to bridge the winter months,” he said. “It’s going to take me 10 years to dig out of the hole that I’m in.”

Here’s where the relief package stands:

Jobless benefits

The CARES Act, passed earlier this year, created a $600 per-week bonus COVID-19 unemployment benefit that sustained household incomes and consumer demand during the springtime shutdowns. It expired at the end of July and Republicans oppose renewal. The CARES Act also allowed for additional weeks of emergency pandemic unemployment payments at regular benefit levels — which are themselves about to expire, on Dec. 31. Any deal is sure to extend the emergency benefits, and a bipartisan compromise framework that’s helping guide the talks calls for restoring half of the bonus benefit, or $300 per week more.

Business subsidies

Another sure thing is a reauthorization of the Paycheck Protection Program, also established by the CARES Act, to give a second round of subsidies to businesses struggling through the pandemic and make other changes to the program, which enjoys bipartisan support but is particularly revered by Republicans. Leftover PPP funds from two springtime infusions into the program would cover almost half of the $300 billion or so cost.

Direct payments

President Trump has long supported another $1,200 round of direct payments to most Americans, subject to income limits that make upper-bracket taxpayers ineligible. House Democrats support the idea, but it is unpopular with many Senate Republicans and was left out of a scaled-back Senate GOP plan. A bipartisan bill by Sens. Susan Collins, R-Maine, and others, leaves out the direct payments as well, and their cost — up to $300 billion — could render them too expensive for the year-end package, though lawmakers ranging from Rep. Alexandria Ocasio-Cortez, D-N.Y., to Sen. Josh Hawley, R-Mo., are pushing to retain them.

State and local governments

This is one of the trickiest issues in the talks — another round of aid to states and local governments to follow a $150 billion installment this spring. It’s a top priority of Pelosi and other Democrats but is opposed by many Republicans, who warn it would bail out states run by Democrats like California and New York. Trump doesn’t like the idea as well, but Pelosi’s demands for the money have been slashed from earlier amounts approaching $1 trillion. Revenue losses due to COVID-19 haven’t been as large as feared. But smaller localities left out of the first tranche of payments are eager for funding. A plan endorsed by moderates would provide $160 billion.

Liability shield

Businesses reopening during the pandemic have for months been seeking a shield against lawsuits claiming negligence for COVID-19 outbreaks. McConnell is the most potent backer of the idea and he’s drafted sweeping protections against lawsuits for businesses, universities, and other organizations. The powerful trial lawyers lobby — which still holds great influence with Democrats — is opposed, and McConnell’s fears of a wave of COVID-related lawsuits haven’t materialized. Veteran Senate Judiciary Committee members Dick Durbin, D-Ill., and John Cornyn, R-Texas, have been deputized to negotiate the issue, a sign the talks are at a serious stage.

Odds and ends

Numerous smaller items are ripe for inclusion: a $10 billion for the Postal Service; a $20 billion-plus deal adding food aid sought by Democrats and farm subsidies favored by Republicans; more than $100 billion in funding for schools seeking to reopen; and funding for child care, Amtrak, transit systems, and health care providers.

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