Criminology junior Alexandra Garza was working a shift March 15 at Teppanyaki Chinese Buffet when the owners told her she was being laid off that same day. She remembered the owners being worried about restaurant traffic slowing down due to social distancing practices.
“The owners were just freaking out because it was slow, and they heard all the news about the restaurants,” Garza said. “I was a little upset, because the job was the only income I had. I was also working part-time and going to school at the same time. It was my second time being laid off in the past two years.”
Fortunately, Garza quickly found a temporary job with H-E-B, saving her the hassle of being one of the 292,000 Texans who have filed for unemployment as of March 28, according to the Texas Workforce Commission.
“I know a lot of people are still not working, so I feel kinda lucky,” Garza said. “I know this time is really difficult; finding a job and having to file for unemployment.”
On the same day, communications senior Stephanie Mulford was working her last shift as a bartender at the downtown Omni hotel. The bar had been empty all day and had been slow since March 9.
“It was probably some of the slowest days I’ve worked at the hotel,” Mulford said. “I would go hours without a customer. We’d close two to three hours early some nights just because we already started taking a hit.”
The hotel held two meetings that day where management explained to employees that they were being furloughed and what that meant. This is part of a nationwide downturn in the hospitality sector as hotels and resorts close down as more people are staying home.
“I honestly saw the whole thing coming,” Mulford said. “My manager in my specific department was super open from everything coming from the top down, and so I had a friend who worked at the Chicago Omni and they closed before us, so I was just waiting for it to happen.”
Mulford, who lives with her boyfriend, is living off their savings and has recently filed for unemployment benefits.
National economic impact
The spread of COVID-19 has jeopardized the financial security of many people and businesses, which are now seeking financial relief.
In March, the national unemployment rate rose to 4.4%, according to the U.S. Bureau of Labor Statistics.
As this rate reflects a 0.9% monthly increase, the BLS reports this downfall to be the most dramatic change within a month since 1975. This translates to the number of unemployed persons rising from 1.4 million to 7.1 million in March. Accordingly, there has been an increase in applications for unemployment benefits.
The Texas Workforce Commission website shows the number of unemployment benefit claims filed from the week ending on Feb. 29 totaled roughly about 7,393. Fast-forward to March 28 and approximately 292,522 claims were submitted throughout the week.
These numbers reflect businesses’ decisions to either close their doors, shorten hours or limit personnel.
Nationally, the leisure and hospitality industry sector declined by 490,000 jobs. Out of that number, the food and drinking business represents a chunk of 417,000, according to the BLS.
This industry includes the job losses of A&M-San Antonio students like Garza and Mulford.
As the international battle continues to flatten COVID-19’s curve, the U.S. is likely to enter a recession, said economics associate professor Dr. Sajjadur Rahman, A&M-San Antonio.
“It depends on how fast you can control the spread of COVID-19; it’s growing at an unprecedented rate,” Rahman said. “The economy is moving very slowly. We really don’t know when we’re going to reach that flattening point.”
However, a recession cannot be declared official until the gross domestic product data is released; the data comes out on a quarterly basis, Rahman said.
The first national GDP data for 2020 is expected to be released on April 29, according to the Bureau of Economic Analysis.
“You will see that sometimes that GDP is going up and going down,” Rahman said. “It depends on the prospect of getting your job as a student when you enter that job market and it depends on what that business cycle looks like.”
Mays Center offers Money Coaching program to students
A potential resource for students who may be struggling financially after being furloughed or laid off is available through the Mays Center for Experiential Learning.
The Money Coaches program offers one-on-one sessions with College of Business graduate students hired by the Mays Center to give financial advice. The sessions are designed to help students reach financial goals, plan budgets and prepare for big purchases. Students can schedule virtual appointments with a money coach through Handshake.
Eliasz McCullen is the coordinator for programs and partnerships at the Mays Center and is in charge of the Money Coaches program.
“I would say that during this time, looking out into the community and seeing which resources are out there, utilizing as many resources as possible,” McCullen said. “I think that those are going to be key.”
Stimulus bill passed to ease financial burdens
In response to the economic downturn caused by the coronavirus pandemic, the federal government passed a $2 trillion stimulus bill to provide a financial cushion for workers and businesses who are struggling with the shutdowns.
President Donald Trump signed the bill on March 27 after it passed through the Senate with 96-0 votes, with four senators absent. The bill is the largest stimulus package to be passed through Congress in history.
The bill will send $1,200 checks to American families earning less than $75,000 per year and lower payments to families who make less than $99,000 per year with an extra $500 per child. Funds will also be used to expand unemployment benefits and will include freelance and gig workers. The bill also included a provision that suspends federal student loan payments until September, during which the loans will not accrue interest.
Many Americans who have been laid off or own businesses that are shut down will be able to pay for rent and groceries a little bit longer with the passing of the bill. For students who support themselves like Mulford, the bill is going to be a big help to ease expenses.
“To me, right now, anything is better than nothing because I do support myself solely,” Mulford said. “So I’ll take what I can get.”
