Layoffs that just a month ago were labeled “temporary” are now being tagged “indefinite” or “permanent.” t.co/0QKwEOmtuz
— Lisa Abramowicz (@lisaabramowicz1) May 6, 2020
Although Covid-19 fatalities in the U.S. haven’t started to trend down yet, economists are beginning to see signs that the recession is bottoming out. Decision makers from President Trump down to company chief executive officers are hoping more than $2 trillion in fiscal stimulus and the gradual lifting of restrictions could set the stage for a significant rebound this summer.
Yet what’s happening to Michigan Maple points to a worrying trend emerging from the stacks of layoff notices filed by businesses in California, Florida, and New York, where service industries have been hammered by lockdown orders, as well as politically important swing states such as Michigan and Ohio, where key industries such as steel and autos already faced headwinds going into 2020. Plenty of layoffs that just a month ago were labeled “temporary” are now tagged “indefinite” or “permanent.” Alongside announcements of sweeping staff cuts by major employers such as Boeing Co. and U.S. Steel Corp. and the accelerating pace of downsizing in brick-and-mortar retailing, such notices are a sign that even as businesses continue to hope for a speedy recovery, they are starting to plan for a slow one.
You can see it in Ferndale, Wash., where aluminum giant Alcoa Corp. recently notified state officials that it will be laying off 700 workers by the end of July as it shuts down a smelter that has been a fixture in the community since 1966, part of a plan to “curtail” almost 50% of its global smelting capacity.
ADP -20 million jobs lost in one month. Just incredible pic.twitter.com/EbQddndlbd
— Thomas Thornton (@TommyThornton) May 6, 2020
What makes economic shocks temporary is people's belief that they are temporary.
— Peter Atwater (@Peter_Atwater) May 6, 2020