The Huge Fear: How Do I Pay The Bills?

Authored by Mike Shedlock via MishTalk,

Those living paycheck to paycheck are the first to lose their jobs and have hours cut. They are justifiably worried.

Jobs that require personal contact such as servers in restaurants, those running a cash register or cleaning hotel rooms are the most vulnerable to layoffs. Those workers are flooding state unemployment websites across the country.

Here's the surging fear ‘I Have Bills I Have to Pay.’

As coronavirus shutdowns halt commerce across the U.S., low-wage workers, many of whom live paycheck to paycheck, are being quickly stung. That includes restaurant workers, hotel maids, dog walkers and child-care providers. In many cases, the cuts are tied to shutdowns and cancellations of events in sports stadiums, industry conventions, casinos, music festivals and other public gatherings.

Malls, restaurants and hotels have closed in many areas of the country. Already, the number of Americans seeking unemployment benefits—a proxy for layoffs—increased last week by 70,000 from the previous week, with states telling the Labor Department the cause was the pandemic. Economists predict a much bigger surge when numbers are released for this week, with Goldman Sachs Economics Research estimating roughly 2.25 million new claims for jobless benefits.

More than 90% of the announced U.S. job cuts tied to the coronavirus were at restaurants and other entertainment and leisure businesses, according to outplacement firm Challenger, Gray & Christmas.

Job Contagion

Despite an economic expansion that brought with it a 50-year low in unemployment, many American households remain a paycheck away from financial stress. Almost 40% of Americans don’t have enough cash on hand to cover an unexpected $400 expense, a 2019 Federal Reserve survey concluded.

The virus relief bill passed by Congress this week expands unemployment insurance and provides more money for food stamps, aiming to provide an initial safety net as layoffs increase. The bill also requires businesses with fewer than 500 employees provide two weeks of paid leave in certain circumstances, with an additional 10 weeks of leave at two-thirds pay for workers to care for children when their schools or day cares close.

Bill is a Disaster

Restaurants that are closed and have no money coming in have to pay cooks for not cooking and servers for not serving.

Please consider House Pares Back Paid Sick and Family Leave Benefits in Coronavirus Bill.

A small business industry group said the bill would impose "potentially unsustainable mandates" on its members. Many have already been negatively affected by the coronavirus outbreak, Kevin Kuhlman, senior director at the National Federation of Independent Businesses, wrote in a letter Friday to House leaders.

"Unfortunately, some small employers simply do not have the operating budget to afford paid family and medical leave," Kuhlman wrote. "By requiring small businesses to shoulder additional burdens and costs, small businesses who cannot afford to keep up will close."

Under the legislation, small businesses with fewer than 50 employees could apply for financial hardship waivers from the leave provisions affecting workers whose children's schools have closed.

The vast majority of the 35 million workers at these small firms currently lack paid family leave, said Sarah Jane Glynn, senior fellow at the Center for American Progress, a left-leaning think tank.

Also, as part of a compromise with the White House last week, House Speaker Nancy Pelosi agreed that the bill would not apply to the roughly 60 million Americans who work at companies with 500 employees or more -- though 89% of these folks already receive paid sick leave.

Small businesses on thin margins have to provide paid health care for two weeks and 2/3 benefits for another 10 but large businesses don't!

If this reporting is accurate, small businesses are going to go bankrupt in huge numbers over these absurd provisions.

London Joins the Closure Party

9% of the US Has Been Laid Off Due to the Coronavirus

A SurveyUSA poll shows 9% of the US Has Been Laid Off Due to the Coronavirus

I crunched the numbers based on those poll stats and come up with a U3 unemployment rate of 12% and a U6 rate of 39.7%. See the link for details and calculations.

Also note that Trump Asks States to Hide Unemployment Claim Data

Apparently the data is better if no one sees it. In practice, this makes people more nervous about what the government is hiding.