Maylin Rodriguez-Ramos had to adapt to the coronavirus like all college students did, hunkering down in March for online learning at her small apartment on Armenia Avenue.
But unlike most students, the 20-year-old political science major at the University of South Florida faced the added anxiety of Trump administration efforts to send home students like her who were brought to the United States illegally as children.
She breathed a sigh of relief when the Supreme Court ruled against the administration, saying it had failed to follow rule-making procedures when it tried to end the program that enables her to stay here — Deferred Action for Childhood Arrivals or DACA.
But her legal roller-coaster ride kicked in again when the administration announced July 28 that renewals under the program would be limited to one year at a time instead of two and that no new applications will be accepted.
“It has been very difficult to digest all this news in such a short time,” Rodríguez said. ”I feel heartbroken because many of us think that this could be the last time.”
The deferred-action program started in 2012 with an executive order from the Obama administration, enables about 660,000 young, undocumented immigrants known as “dreamers” to stay here while working and going to college. It does not provide a path to citizenship or voting.
The program is open to those brought to the United States before they were 16, have lived here at least five years and have a clean legal record. It provides recipients a Social Security number and enables them to work legally. The program also makes Rodríguez eligible for a Florida driver’s license and in-state college tuition.
Rodríguez came to the United States from Honduras at 4 and knew about her immigration status before she graduated from high school and began looking at colleges.
Rodríguez said she must renew her deferred-action standing in May 2021. The fee is $495. Two years ago, when she first submitted her application, she covered the costs of the process with money she saved working at a part-time job.
She hopes to see the program continue.
“It is a cycle that never ends,” she said. “That is why I believe that we need a definitive solution for all of us who are in this and for those who come after us."
Cutting renewals from two years to one is a move many immigrant advocates expected, said Ted Hutchinson, Florida director for FWD.us — a bipartisan organization working to reform immigration and criminal justice systems that were founded by business and tech leaders including Facebook’s Mark Zuckerberg.
“We saw it coming,” said Hutchinson. “But we will continue to insist that an agreement be reached. There is a lot to do but I’m optimistic.“
In the wake of the Supreme Court decision, the Trump administration is reviewing justifications for eliminating the deferred-action program and notes that it faces other challenges in federal courts. The administration says the program encourages smuggling and illegal border crossings, creating problems in law enforcement, child welfare, and border security.
Italia Rico-Hurtado, 29, another deferred-action program participant, said dreamers should be seen for their commitment and advancement and not as an unwanted burden to the country.
Rico-Hurtado, an anthropologist, recently graduated with honors from private Rollins College in Winter Park. She hopes to study now for a master’s degree in public health. She was 8 when she came to the United States with her parents from Colombia because of unrest and struggling economy there.
“I discovered myself, as a person and a student,” she said. “I knew that dreams are not impossible and everything can be achieved with effort.”
Her family worked to become involved in the life and culture of their adopted country.
“I was a little girl and I believed that everything was fine,” Rico-Hurtado said.
She works as a spokeswoman for the Hispanic Federation, a nonprofit based in Central Florida that seeks to empower and strengthen Latino families and institutions. She encourages immigrants to register and vote and take a more active role in public matters.
“It is a very important issue because people must have a voice. We have great potential.”
Adonia Simpson, a lawyer for the Miami-based immigrant rights group Americans for Immigrant Justice, said dreamers are worried at how many years have passed with the deferred-action program still on shaky ground.
“The difficulty about DACA is that it was never a permanent solution,” said Simpson. “It was a response to deliver a new path.”
The biggest single challenge raised by the pandemic crisis is retooling the broken jobs machine that was roaring just months ago.
In May and June, the U.S. labor market staged the fastest, sharpest upswing in history, albeit from extremely depressed levels. That surge raised hopes that outsize, durable monthly job gains would spearhead a rapid recovery from the pandemic-driven lockdown that sank national income at a 33% annualized rate in the second quarter, the biggest drop in postwar history.
The Department of Labor's eagerly awaited "Employment Situation" survey for July, released Aug. 7, is bound to curb that enthusiasm. It shows that the U.S. added 1.76 million jobs during the month. That number was certainly decent, beating economists' forecasts of 1.48 million. But it marks a deceleration from the astounding gain of 4.8 million in May and lesser but still impressive 2.5 million increase in June. Investors, who cheered the last two reports and hiked stock prices in expectation of a rapid return to good times, were unimpressed.
The widely reported headline number, the change in nonfarm employment, comes from the Department of Labor's July payroll survey of 145,000 businesses. The unemployment rate is calculated from another set of data assembled in the Household Survey that polls millions of families on pay, entries, and exits from the workforce, and other broad labor market trends. The Household Survey reports that 144 million Americans had jobs in July, a cataclysmic fall from a record 159 million in February. To make matters worse, the "labor force," the number of Americans who either have jobs or are looking, has shrunk by 3.9 million since mid-2019. Bleak prospects have so discouraged many job seekers that they've given up. Those nearly 4 million dropouts aren't counted as "unemployed." So the official jobless rate actually understates the legions of Americans who can and want to work but aren't getting paychecks.
Where the jobs are—and aren't
The report also shows two major crosscurrents: The huge losses are concentrated in several devastated, consumer-facing sectors, while industries catering to the new pandemic-driven lifestyle and spending patterns are hiring briskly. In the past year, all retail businesses have lost 900,000 jobs, or almost 6% of all jobs, though stores, restaurants, and the like have gained back over 1 million positions since April. In air transportation, the rolls have shrunk by 115,000 or almost a quarter, and the losses keep climbing. Leisure and hospitality have been pummeled, shrinking by 4.8 million jobs or 28%, despite regaining around 3 million positions since April. Taking the brunt of the damage are hotels, where four in 10 jobs have vanished, and restaurants and bars that have sent home one-fifth of last year's staff—stranding 2.6 million cooks, waitresses, and managers. Healthcare took a lesser hit of 600,000 positions, or 3.5%, as many physicians' offices closed for months.
The data also displays surprising pockets of strength in COVID-resistant industries. Computer and electronics products are even with last year with a 1.1 million total payroll, and jobs in making and selling PCs and other computers, staples for the work-at-home economy, are up sharply. The headcount of couriers and messengers has jumped 143,000 or 18%, following the boom in-home deliveries. Building materials and garden supply store employment has risen by 45,000, to 1.37 million, as families stuck at home find a new hobby in refurbishing their abodes. General merchandise stores, including warehouse emporia and supercenters offered by the likes of Walmart and Amazon, big beneficiaries of the surge in online shopping, added 140,000 workers since mid-2019.
The big underlying crisis? The pandemic crisis is on track to permanently destroy many millions of positions, even more than were lost for good in the Great Recession. The vanished paychecks from the lockout's losers—think airlines—can be replaced only by a big wave of hiring from its winners, burgeoning players from online shopping to video conferencing gear. Those businesses benefit from the main digital trends reshaping the ways Americans live, play, and earn, such as working from home, the suburban housing revival, streaming entertainment, and shifts to online shopping and telemedicine.
Regaining that lost ground requires getting hundreds of thousands of more people each month entering these newly created, post-pandemic jobs than the hordes exiting the industries pounded by the upheaval. In other words, the spigot of new positions created by the post-COVID lifestyle needs to run full blast, so that a lot more water is coming in than draining out, making the level in the "employment tub," total Americans at work, keep rising at a strong, steady pace.
The U.S. economy's great dynamism practically guarantees that eventually, we'll drive joblessness back down to at least the historic average, in median-good times, of 5% or lower. The danger is that it may take an unusually long time, so that the pain of elevated bankruptcies, credit card defaults, and foreclosures will be much greater than if the new generation of jobs replaced the many millions that already disappeared, and legions more that will expire in the months ahead, at high speed.
Unfortunately, our economy faces three major hurdles in getting the employment spigot to pour forth rather than a trickle. First, even if national income manages to regain 2019 levels in 2021, joblessness will remain a lot higher because layoffs are heavily tilted to relatively low-paying positions in such sectors as tourism, stores, restaurants, and hotels that will return more slowly. Second, a surge in job creation won't happen right away, because even companies in the strong post-COVID sectors will be reluctant to hire rapidly until they witness a strong recovery building.
Third, the government's programs that protect workers, though they're supporting take-home pay, provide an incentive for companies to keep workers they eventually intend to lay off on their payrolls. That discourages people who would have rapidly switched to the new generation of jobs offered in the new economy. The upshot: At best, the U.S. will wrestle the jobless rate to the mid-6% range by the end of 2021, meaning that some 4 million fewer Americans will be bringing home paychecks.
The jobs that aren't coming back
An excellent report updated in late July, COVID-19 Is Also a Reallocation Shock, provides one of the best guides to how many positions are going for good, and how rapidly the jobs catering to the post-COVID consumer will take their place. It's based on the Survey of Business Uncertainty that polls 1,000 companies each month to gauge their plans for employment, expectations for sales, workplace practices, and other factors. The SBU is conducted by the Federal Reserve Bank of Atlanta, in cooperation with economists Steven J. Davis of the University of Chicago's Booth School of Business and Nick Bloom of the Stanford Graduate School of Business.
In the April survey, companies stated they don't intend to retire 23% of the workers they've laid from March 1 to mid-May, the period when the big layoffs happened. But Davis, Bloom, and the new report's third author, Jose Maria Barrero of ITAM business school in Mexico City, find that historically, a lot of layoffs thought to be temporary at the time don't actually lead to bringing workers back. When you adjust for that pattern, it's more likely that around one-third—rather than closer to one-quarter—of the positions the companies now don't expect to replace are actually gone for good. The authors cite two studies on the outcomes in other major downturns that also show that on average, about a third of layoffs result in permanent losses.
The authors point out that 27.9 million people filed for unemployment claims in the six weeks ending April 25. If one-third of those lost positions don't return, as past trends indicate, the U.S. by mid-2021 will have 9.2 million fewer jobs concentrated in hard-hit sectors from auto manufacturing to restaurants to airlines than in February of this year, and they're gone forever. In an interview with Fortune, the University of Chicago's Davis confirmed that the 9.2 million figure is "a reasonable estimate of the permanent job losses from COVID-19."
Of course, many of the lost jobs in airlines, restaurants, bars, and hotels will come back, though many others will be counted among the 9.2 million casualties. The authors posit that the rehiring that does happen will happen slowly. That's because it will take a long time for folks who've been practicing social distancing to return en masse to bars, movie theaters, casinos, hotels, or to jet to Paris or Rio on vacation.
It's the combination of workers' slowly returning to their old jobs and a lag in the birth of the new jobs enticing to the post-COVID consumer—those needed to fill the void—that will make the comeback a long slog.
What's working
The authors cite that in some ways this is a tale of two Americas. In April, U.S. companies still posted 4.4 million job openings, and even though that number is 29% lower than in April, it shows that at the same time layoffs are surging, hiring remains remarkably strong. Online grocery sales are up 450% from August of 2019, the report notes, and 24% from April to May. Walmart has taken on 235,000 new employees since mid-March, Lowe's added 30,000 in the spring, and Dollar General, benefiting from strapped bargain hunters flocking to dollar stores, recently raised its payroll by 50,000.
Three-hundred thousand shoppers joined Instacart, while Domino boosted its fleet of pizza delivery drivers by 10,000. These new jobs arrived fast. But elsewhere it will take time for companies to plan or retool new plants, build new supply chains, or overcome regulatory hurdles. Plus, employers want to see signs the economy's on the mend before committing to big new capital investments.
Davis tells Fortune that getting back to a 6% jobless rate sometime by the end of 2021 "would be a big success that would take the good policy and good fortune." The Congressional Budget Office is projecting unemployment at 7.4% for the end of 2021. That's more than double the fabulous number in February, and it means about 5 million more people will be without jobs 18 months from now than were banking checks early this year. The bounce-back started great in May, then shifted to good in June and pretty good in July. Soon the bounce will be gone, supplanted by the biggest transition in memory from old-line jobs to those serving a consumer who's suddenly shopping and living far differently than a few months ago.
The rub is that the destruction happened in a downward rush, and the creation will be just the opposite: a long, clawing climb back.