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Coronavirus layoffs surge across America, overwhelming unemployment offices

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Rebecca Rainey

Employers are slashing jobs at a furious pace across the nation due to mass shutdowns over the coronavirus, slamming state unemployment offices with a crush of filers facing sudden crises.

Long before official government data is expected to reveal the depths of the economic shock inflicted by the coronavirus, reports from state officials and businesses around the country indicate the gathering of a massive wave of unemployment on a scale unseen since the Great Recession.

In New Jersey, 15,000 people applied for unemployment benefits on Monday, a twelvefold increase over normal levels. In Connecticut, nearly 8,000 applications arrived over the weekend, an eightfold increase over the norm. Rhode Island officials reported Tuesday a five-day rise in claims due to the coronavirus from 10 on March 11 to 6,282 on March 16.

More than 45,000 Ohio workers have applied for unemployment over the past week, the Ohio Department of Job and Family Services told Sen. Rob Portman, a nearly sevenfold increase over the previous week.

The dramatic rise in claims could spur further action by Congress beyond the legislation now under discussion. “This demonstrates the urgency for Congress to act, and act quickly,” Portman said Tuesday in a written statement.

According to an NPR/Marist poll conducted Thursday and Friday, 18 percent of households already reported someone being laid off or having hours reduced because of the coronavirus outbreak, with women hit harder (21 percent) than men (16 percent), and people who earn less than $50,000 hit harder (25 percent) than those earning $50,000 or more (14 percent).

“A coronavirus recession is inevitable,” said Josh Bivens, director of research at the left-leaning Economic Policy Institute, in a blog post. He estimated that at least 3 million jobs will be lost by summer. Meanwhile, the U.S. Travel Association was projecting 4.6 million jobs lost this year in the travel industry alone, pushing the unemployment rate up to 6.3 percent.

The layoffs swept businesses large and small. On Tuesday Marriott said it expects to lay off tens of thousands of workers worldwide. MGM Resorts International on Monday closed 150 restaurants and bars, with more closings to come; Caesars Entertainment Corp. said it also has begun layoffs. In D.C., Compass Coffee, a local Starbucks competitor, laid off most of its 189 employees, and the Dubliner, a popular Irish bar on Capitol Hill, laid off all of them, leaving the place empty on St. Patrick’s Day.

During the past 48 hours, unemployment insurance offices around the country were flooded with phone calls, and state unemployment websites crashed in KentuckyOregon, and New York.

Lawmakers on Capitol Hill late Tuesday were racing toward a deal with the White House on an economic stimulus package to aid industries disrupted by the pandemic, and ironing out the details on a separate coronavirus aid package.

But many state unemployment insurance programs are ill-prepared for the downturn. Twenty-two states and jurisdictions, including California, New York, Illinois and Texas, have dangerously low reserves, and 10 have reduced the number of weeks they offer benefits since the 2007-09 Great Recession. The duration of eligibility for unemployment insurance in any given state won’t be affected by the legislation moving through Congress.

With the Trump administration and other nations considering travel restrictions, and more Americans pulling back on nonessential trips, the travel and hospitality industries have been among the first to see job cuts.

“We are adjusting global operations accordingly,” a Marriott spokesperson said in an emailed statement, “which has meant either reduction in hours or a temporary leave for many of our associates at our properties.” The spokesperson said that employees “will keep their health benefits during this difficult period and continue to be eligible for company- paid free short-term disability that provides income protection should they get sick.”

Several airlines have cut back service, and Delta recently announced a hiring freeze in the wake of the outbreak.

Ian Kullgren contributed to this report.

This article was originally published at Politico on March 17, 2020. Reprinted with permission.

About the Author: Rebecca Rainey is an employment and immigration reporter with POLITICO Pro and the author of the Morning Shift newsletter.

Prior to joining POLITICO in August 2018, Rainey covered the Occupational Safety and Health administration and regulatory reform on Capitol Hill. Her work has been published by The Washington Post and the Associated Press, among other outlets.

Rainey holds a bachelor’s degree from the Philip Merrill College of Journalism at the University of Maryland.

She was born and raised on the eastern shore of Maryland and grew up 30 minutes from the beach. She loves to camp, hike and be by the water whenever she can.

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Baltimore Workers File Class-Action Suit Over ESPN Zone Closure

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kari-lydersenIn June the ESPN Zone restaurant in Baltimore’s trendy Inner Harbor shopping and entertainment district closed after workers were given just a week’s notice and state regulators were given only one day notice.

In a class-action lawsuit filed Monday naming ESPN Zone’s owner Disney, five workers allege this was a violation of the WARN Act, which requires at least 60 days notice—or 60 days severance pay—in the case of mass layoffs at companies with 100 or more employees. About 150 workers lost their jobs when the restaurant closed. About 50 workers and supporters protested Monday outside ESPN Zone, then marched to Baltimore District Court where the lawsuit was filed. (See photos by Bill Hughes here).

After the ESPN Zone closed June 16, workers were given a month’s pay on administrative leave and an additional severance based on length of service, which the company has said constitutes WARN Act compliance. But the workers’ attorneys and a grassroots labor group called United Workers says the total pay and severance is still less than what they would be due under the  WARN Act. Severance was due under an agreement with Disney that should be separate from WARN Act compliance, they say.

The case has become a centerpiece of United Workers’ Economic Human Rights Zone campaign in the Inner Harbor, a novel strategy uniting workers at various restaurants and stores to demand that as the area has received substantial taxpayer subsidies, developers of the two major malls should be responsible for making sure workers are paid a state living wage and basic workers rights are respected. Monday’s march came on the second anniversary of the declaration of the Human Rights Zone, and eight years after United Workers’ founding out of a struggle on behalf of homeless vendors at the city stadium.

United Workers began targeting individual employers in the Inner Harbor, but decided it was a more pragmatic and meaningful campaign to target the development as a whole, and demand the two major companies—GGP and Cordish—that lease and sell space commit to making sure their tenants treat workers right.

In a playful post on the United Workers website, they describe the pervasive problems uncovered during an investigation by a pro-labor “Sherlock Holmes.”

Holmes discovered that the trail of worker human rights abuses did not stop with the ESPN Zone, but extends throughout the harbor. Hearing from workers from the Cheesecake Factory, Phillips, and Hooters, he uncovered what lies beneath the surface: poverty wages, stolen tips, sexual harrassment, lack of healthcare, and barriers to education. ‘Different vendors, but the same story? The Inner Harbor is a Poverty-zone! But who is in control?,’ thought Sherlock.

ESPN Zone workers discovered by word of mouth that, they say, managers didn’t intend to give them any notice of the closing at all, until word leaked out over social media websites. That, in fact, is how numerous workers first heard the news. “We would just come to work one day and all the doors would be shut and locked,” said Lenard Gray, 28, who’d worked there more than six years.

The closing was especially problematic since it came during the busiest summer months, when workers count on racking up long hours that – even at pay rates just barely above minimum wage – allow them to save money for leaner seasons. Workers reported becoming homeless, having to withdraw kids from programs and being evicted since the closing.

“We were stunned. It was like walking through a dream. We were just devastated,” said former cook Winston Gupton. He had worked there for more than seven years, and lost his housing after the closure.

The WARN Act – which received national attention during the Republic Windows and Doors occupation in Chicago two years ago – was meant to provide workers time to look for other jobs and state agencies time to offer retraining and social services. The acronym means Worker Adjustment and Retraining Notification.  Even when WARN Act notice is given, an outpouring of state services or retraining opportunities is a rarity. And the Act is regularly violated with few repercussions.

Enforcing it takes lawsuits like the one filed by ESPN Zone workers, which are costly and time-consuming for low-income workers who hardly have time to wait around for a judgment.

But as in the Republic Windows and Doors struggle, the ESPN Zone workers’ lawsuit serves not only to try to hold an employer accountable but also to raise the public profile of WARN Act violations in general and of the Economic Human Rights Zone campaign. Organizers say they will continue to investigate possible labor law violations and working conditions at various Inner Harbor outlets including the Cheesecake Factory, Phillips Seafood and Hooters. When United Workers initially surveyed restaurants trying to find the “worst of the worst,” Phillips’ name came up, they said.

Former ESPN Zone cook Debra Harris said in a statement:

We are sending a message to Disney, ESPN Zone and Inner Harbor developers that private gain should not take precedence over human life. Corporate executives think they can break the law and just get away with it, because harbor developers do not enforce any human rights standards, but we are human beings and we have the right to dignity and respect.

This post was originally published on Working In These Times.

About the Author: Kari Lydersen, an In These Times contributing editor, is a Chicago-based journalist writing for publications including The Washington Post, the Chicago Reader and The Progressive. Her most recent book is Revolt on Goose Island.

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