The Washington PostDemocracy Dies in Darkness

Workers are getting laid off for a second time, as the virus’s surge puts reopenings on hold

Millions of workers are suffering from economic whiplash, thinking they were finally returning to work — only to be sent home again as cases spike

Beverage director Travis Matreyek reads a book at the Churchill in Phoenix on June 26. (Caitlin O'Hara/For The Washington Post)

When she was first furloughed in March, Randee Heitzmann knew how to make ends meet.

She deferred payments on her new Honda Civic, spent $3,000 in stimulus money and tax refunds on other payments, and drained her savings.

Then she was called back to her job as a bartender at a cigar bar near Dallas for five weeks, taking home about $100 per shift, just 20 percent of what she was used to.

But on Friday, Heitzmann was cut loose again, hours before her shift was to begin.

“I don’t have any savings left,” the 28-year-old said. “I don’t know how long it’s going to be before I get a paycheck again."

Millions of American workers are suffering from economic whiplash, thinking they were finally returning to work only to be sent home again because of the coronavirus’s latest surge. Stores, restaurants, gyms and other businesses that reopened weeks ago are shuttering once more, and this time Congress appears less inclined to provide additional aid. Other companies that had banked on customers returning and restrictions lifting — such as hotel chains, construction firms and movie theaters — are seeing hours cut and reopening dates pushed back indefinitely as consumer demand stalls.

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And many governors, including some who had drawn scrutiny for initially playing down the virus’s risks, are issuing new safety restrictions, in some cases just weeks after the first round of guidelines had begun to lift. In recent weeks, three states — California, Florida and Texas — have implemented new policies that partly restrict restaurant or bar service. Nine others — Arkansas, Delaware, Idaho, Louisiana, Michigan, Nevada, New Jersey, New Mexico and North Carolina — have postponed or slowed reopening plans.

Thousands of workers are caught in these rapidly shifting seas, many of them hourly and low-wage service employees, and are now facing unemployment for a second time. They say the past few months have been jarring: navigating unemployment in March, preparing to go back to work in April or May, and now confronting the prospect of another long stretch without a paycheck.

This time, many say they’re on even shakier financial ground as they topple into yet another period without a job. They face what experts have begun calling a “fiscal cliff”: the July end date for the $600 in weekly supplemental aid that has helped keep so many families afloat.

“Luckily, I have rent for this month," said Heitzmann, who pays $1,200 a month for a one-bedroom apartment. “But after that, I don’t know.”

For restaurants and bars, another big hit

For many restaurant and bar owners and workers, the past few weeks have brought an onslaught of bad news. Some said they watched wearily as infections began to tick up, just as they were starting to reopen after months of being closed.

Then came all the new cases.

In Phoenix, more than a dozen restaurants closed in early June after customers or employees were found to have been infected with the virus. In Jacksonville, Fla., restaurants began closing after cases rose there — in one outbreak, 16 friends tested positive for the coronavirus after dining at an Irish pub, where seven employees later tested positive. In Houston, restaurant owners are warning that they may not survive the new round of closures. In California, Gov. Gavin Newsom (D) ordered bars closed in seven counties, including Los Angeles.

Kell Duncan, who operates the Churchill, an indoor market in Phoenix with 10 shops and restaurants, described the bind restaurant owners have found themselves in with the caseload surging.

After cases crossed the 40,000 threshold in Arizona, he closed down the business and sent all 30 employees home for the second time — just a month after reopening — knowing that if he stayed open, someone would probably get sick.

“We’ve been lucky," he said. “Ultimately, we said, ‘This just feels wrong. Let’s close and wait this thing out.' "

Sherry Weir, who owns Big O’s Simply Delicious outside Fort Worth, made a similar choice, voluntarily shutting down her restaurant and deli on Friday.

The food service and bar industry — which employs more than 8 million people, or about 5 percent of the workforce before the pandemic — has been decimated by the virus, losing more than 6 million jobs in March and April. But a strong rebound of 1.4 million jobs in May helped drive down the country’s unemployment rate, sending hopes soaring that an economic recovery was underway. This new round of closures points to the significant challenges that will exist until a coronavirus treatment or vaccine is developed.

“It’s hard when there’s not been clear leadership and the population is getting mixed messages,” said Kevin Schulman, a professor of medicine and economics at Stanford University. “How do we plan for economic restoration while protecting public health? It is a little bit of Whack-a-Mole. There’s not a great model for that.”

Across the U.S., cities, towns and villages are facing a new coronavirus problem. It's an unfolding financial crisis, brought on by evaporating tax revenue. (Video: The Washington Post)

Pain sinks deeper into the economy

The rising number of cases has sent a cascade of fear across other industries, too, not just those directly affected by shutdowns.

Samantha Hartman, 29, an administrative assistant at Rosen Hotels in Orlando, had been preparing to return to work at the end of July. The company had told employees that business would be back to normal by then, she said.

But a follow-up last week from her employer confirmed the sinking suspicions she felt as cases spiked in the area: The reopening would be pushed back to August.

Hartman, who has a heart condition and relies on her job not only for her income but for its generous health-care plan, fears that that date will prove similarly quixotic, she said.

She’s concerned about the end, scheduled for late July, of the extra $600 a week in federally funded unemployment benefits. And she said she feels torn between waiting out the potential return to her work and applying for jobs in other fields that may be less vulnerable to the shutdown than the hospitality industry is.

“I’m in a weird place where I have no idea where my life stands a month out,” she said. “That’s very terrifying.”

Kadeem Howell, a physical therapist in New York, has spent the past week teaching himself how to trade stocks and options after being furloughed for the second time in three months.

When he was laid off in March, Howell relied on unemployment benefits to pay his bills. But he was called back to work in May at a Manhattan orthopedic clinic, a mixed blessing as he worried about bringing the virus back to his home in Westchester County, where he and his wife live with her parents, who are in their 70s.

His bosses gave him an ultimatum: He could show up for work or voluntarily terminate his position, which would’ve meant forfeiting unemployment insurance.

“I just kept thinking: Do I risk going on public transportation, going into the city, knowing I’m going into the epicenter of this disease?” he said. “It’s a very uncertain and frustrating time, but I didn’t feel like I had much of a choice. I decided to keep working."

But he was furloughed again on June 15. He and his wife had hoped to buy a house this year but are putting their plans on hold.

“I feel stuck," he said. “Do I stay on unemployment? Do I apply for a job somewhere else? Do I just wait and sit on my heels? There is no easy answer."

No end in sight

The fresh round of closures is raising fears that the already challenged recovery could stall out.

The country has been processing about 1.5 million new unemployment insurance applications a week for most of June — an alarmingly high rate that remains well above pre-pandemic records, although it has come down from a peak of more than 6 million in March.

The number of people who are continuously receiving unemployment insurance ticked down slightly last week, from 20.5 million to 19.5 million.

But there are those, such as Michael Hebert, 25, whose financial challenges aren’t captured in the weekly statistics.

Hebert is technically employed, but just barely: The 52 hours a week he used to work at a hot-dog eatery at the airport and the Harrah’s casino in New Orleans before the crisis have been cut down to eight, after he was summoned back to work a few weeks ago.

Hebert said he gets no sick time, vacation pay or health benefits from his work, just $10 an hour, which hardly pays the bills.

“It’s barely enough to pay a phone bill,” he said. "Two seconds, it’s gone. It’s a struggle because if we don’t meet the bills, we’re going to be on the streets.”

Scholars have begun debating how influential temporary shutdowns are on the country’s employment levels.

According to a preliminary study by two Harvard researchers, limitations at restaurants, bars and nonessential businesses accounted for 4.4 to 8.5 percent of the significant increase in unemployment in mid-March.

Public health experts said the threat of a new wave of closures is why stringent measures have been needed to prevent the virus’s spread.

“It’s an impossible choice,” said Emily Timm, the co-executive director at the Texas-based Workers Defense Project, a nonprofit organization that helps immigrant and undocumented workers. “People don’t want to risk their family’s health. But it’s not a choice if you don’t have access to the safety net or you were living paycheck to paycheck before the coronavirus hit.”

The organization has been issuing $750 grants to laid-off workers who weren’t eligible for unemployment insurance because of their documentation status. Timm said many of the recent beneficiaries are people who had gone back to work in the restaurant or hospitality industries only to be laid off again.

Hartman, the Orlando-based administrative assistant for Rosen Hotels, said she thinks elected officials in states with rising cases who minimized the threat of the virus are responsible for the increase — and the ensuing damage to the economy.

“The longer we stay open, the more our cases rise, the more it gets publicized in the news and the more it puts off people from coming here," Hartman said. "So I think we should have stayed shut longer — that initial shutdown was less detrimental than shutting down a second time.”

There are some indications that factors beyond the shutdowns weigh more heavily on the economy.

The Federal Reserve Bank of St. Louis issued a recent report saying that businesses said declining demand from consumers was the top constraint on their recovery, ahead of social distancing requirements and concerns about their workers’ health.

“The pace of business reopening has to be completely in sync with the amount that demand is going up,” one of the authors, Charles S. Gascon, an economist at the bank, said in an interview. “It’s not like there’s an on or off switch in the economy that you flip and things go back to normal. Things have to get back up to whatever the new normal is."

Only four states — New Hampshire, New Jersey, North Dakota and Vermont, representing just 4 percent of the U.S. population — are meeting all the federal criteria for reopening, according to a recent report from Goldman Sachs.

Back in Phoenix, Duncan says it could be months before he opens the Churchill again.

He and his team spent weeks rethinking layouts, adding foot pedals to doors and installing hand sanitizer stations after the business closed the first time, in mid-March. They kept paying employees — first from their own pockets and then with money from a $200,000 Paycheck Protection Program loan.

But Duncan said he still had a nagging feeling that he wasn’t doing enough to protect workers and customers, as the number of coronavirus cases around him ballooned. There was little guidance from local officials, and he couldn’t get clear answers from his insurance company about what would happen if there were an outbreak at the Churchill.

He has deferred his monthly mortgage payments, but he says the uncertainty of when — or how — to reopen has been debilitating.

Weir and her husband, who own the deli outside Fort Worth, told their staff that they’re closing for two weeks. But they have a plan, should they need to remain dark through the end of the year: using money from a small loan they took out to expand their business during more auspicious times to keep it and its eight employees afloat now.

But there are more important considerations than the health of the business at the moment.

“It was just a matter of time before we got sick, or somebody else did because they were in our establishment," Weir said. “I don’t want any part in that."