Tales From The Trump Depression, Con't

As the Paycheck Protection Program, allowed to expire by Senate Republicans, has run out of money, and business leaders still see no clear plan from the failed Trump regime on COVID-19, companies are turning worker furloughs into millions of permanent job layoffs as the myth of the "V-shaped recovery" is being shattered.

A new wave of layoffs is washing over the U.S. as several big companies reassess staffing plans and settle in for a long period of uncertainty. 

MGM Resorts International and Stanley Black & Decker Inc. recently told some employees furloughed at the outset of the coronavirus pandemic that they wouldn’t be put back on the payroll. And companies bringing back the majority of furloughed workers, including Yelp Inc. and Cheesecake Factory Inc., are making reductions as they adjust to the new reality that many coronavirus-related closures won’t be resolved this fall.

More fresh layoffs at big employers loom. A day after Salesforce.com Inc. posted record quarterly sales, the business-software company notified its 54,000-person workforce that 1,000 would lose their jobs later this year. Coca-Cola Co. said Friday it plans to lay off some employees and offer voluntary buyouts to about 4,000 employees in the U.S. including Puerto Rico as well as Canada. American Airlines Group Inc. and United Airlines Holdings Inc. have said more than 53,000 workers could be affected in about a month if the airlines don’t receive another infusion of funds from the government. 

The outlook reflects an acceptance by corporate executives that they will have to contend with the pandemic and its economic fallout for a longer period than they had hoped. Some CEOs and other executives suggest more pain is ahead, said David Rubenstein, co-executive chairman of Carlyle Group, a private-equity firm with around $220 billion in assets under management.

“Privately, some of them may hint that they probably won’t need as many workers as they once thought,” Mr. Rubenstein said. “They’ll have to reinvent their businesses in ways that they hadn’t done before.” 

The latest layoffs come as there have been glimmers of an economic recovery. Many employers have rehired some workers after cutting jobs this spring, pushing the U.S. unemployment rate down to 10.2% in July after it nearly touched 15% in April, according to federal data. Some salaried workers and executives are seeing their pandemic pay cuts restored. That has led some to theorize that the economy is increasingly proceeding on two tracks, as companies modifying operations or shutting down entire divisions determine that they need fewer people, especially lower-income workers. 

A survey of human-resources employees released by Randstad RiseSmart found nearly half of U.S. employers that furloughed or laid off staff because of Covid-19 are considering additional workplace cuts in the next 12 months.

New applications for unemployment benefits, a proxy for layoffs, have hovered around one million a week for much of the summer. A drop in jobless claims one week tended to be snuffed out within a few weeks when claims rose again. Summer unemployment has improved since March, when a peak of about seven million people applied for jobless benefits in one week, but the numbers remain stubbornly high.  

Economists say the new layoffs reflect a shift in corporate thinking toward a more protracted crisis. 

“Companies that thought they could either cut wages temporarily or cut costs temporarily or hold on are now finding out that the weakness of the pandemic is now longer than they hoped,” said Diane Swonk, chief economist at Grant Thornton.
Following casino shutdowns and furloughs in March, MGM Resorts said it would lay off 18,000 furloughed workers in the U.S. as the global travel slowdown impedes the gambling industry’s recovery. The job cuts, which start Monday, represent about one-fourth of the company’s prepandemic workforce of 68,000 U.S. employees.

American Airlines said that unless it receives more federal aid, it will furlough 17,500 union workers and move forward with 1,500 layoffs in its management ranks this fall. Flight attendants, 8,100 of whom are furloughed, would be the most affected. Airlines agreed not to terminate employees or cut pay rates through the end of September as a condition of taking $25 billion in federal funds. 

United Airlines said it would furlough 2,850 pilots, which is 600 more than it had anticipated, as it seeks more federal aid. United has warned that as many as 36,000 of its employees could be eliminated Oct. 1 if the airline doesn’t get more government help. The union that represents United’s pilots called it tragic that the carrier hasn’t provided more options to allow pilots to leave voluntarily. Delta Air Lines Inc. said it would let go of 1,941 pilots. 

After furloughing or reducing hours for more than 10,000 workers earlier this year, tool maker Stanley Black & Decker said that in October it will permanently lay off 1,000 of them but bring back 9,300 to a full-time schedule. Chief Executive Officer James Loree told investors on a recent call the cuts are part of a $1 billion cost reduction.
“It paves the way for us to manage successfully through any reasonable economic scenario which may unfold in the coming months,” he said. 

Hundreds of furloughed workers at C.H. Robinson Worldwide Inc., one of the largest freight companies in North America, won’t be put back on the payroll, in part because their positions have been automated, the company told investors on a recent earnings call. The job cuts will become “permanent cost savings from our investments in tech,” said Bob Biesterfeld, chief executive of C.H. Robinson.

I fully expect the rebound that happened in June and July to be reversed completely and then some as the reality of a vicious COVID-19 flu season hits with the force of Hurricane Laura all across the US. We're still seeing 1,000+ deaths per day with literally no end in sight to the casualties.  We've passed six million COVID-19 cases, headed for seven million, headed for 200,000 dead by Labor Day.

By the time Joe Biden enters the Oval Office, we're going to have to deal with a full-blown depression with crippling double-digit unemployment as a pandemic burns through the US for a second year. And should Trump retain power, everything is lost.

It will take years to get us out of this hole, and that's only if Biden and the Democrats can win back the White House and Senate and keep power from the nihilist GOP in 2022, if we can avoid a full-blown terrorist insurrection by white supremacist militias, if we can avoid a pandemic causing systemic breakdown of basic services. We're going to permanently lose tens of millions of jobs, and they will have to be replaced by something.

None of this is guaranteed.  It's going to take a massive generational effort to come out of this decade just to get back to 2019's economy, much less 2005. But it starts with cleaning house and getting rid of the GOP, and getting to work again.

Without that, we're done.