Jose Mogna of Miami has been checking his phone constantly for a text or call from his manager telling him it’s time to return to his job at a construction supply company. Mogna was furloughed at the end of March, making him one of more than 30 million Americans suddenly without a job during the pandemic, but he’s hopeful he will be called back soon.
The vast majority of laid-off or furloughed workers — 77 percent — expect to be rehired by their previous employer once the stay-at-home orders in their area are lifted, according to a nationwide Washington Post-Ipsos poll.
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Nearly 6 in 10 say it is ‘‘very likely’’ they will get their old job back, according to the poll, which was conducted April 27-May 4 among 928 workers who were laid off or furloughed since the outbreak began. But there’s concern that many of these workers are too optimistic about being rehired given how much uncertainty remains about health and business conditions in the year ahead.
And the scope of the problem keeps mounting. The Labor Department on Thursday reported that 3.2 million Americans filed unemployment claims last week, bringing the seven-week total for people seeking jobless benefits to more than 33 million Americans. The unemployment rate has jumped from around 3.5 percent earlier this year to close to 20 percent now, many economists believe.
The United States is facing its biggest unemployment crisis since the Great Depression, as many firms have been quick to let employees go. Economists say the best chance for any sort of recovery is to get as many workers as possible back into their old jobs. Much of that will depend on how reopening goes.
‘‘I figure they might call me at the end of this month to start again in June. But I don’t know,’’ said Mogna, 54, who sells materials to construction sites. ‘‘If I worked in a restaurant, I probably wouldn’t be that optimistic. But construction is still going.’’
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Going back to a prior job is typically much easier — and faster — than searching for an entirely new job. It also gives laid-off workers a greater sense of comfort about their finances. Studies show that workers who believe they are only a few weeks away from a steady job again are less likely to spiral into a depression or stop paying major bills.
But economists warn the optimism could be misplaced. The longer people are out of work, the less likely they are to be called back. In an alarming trend, companies such as General Electric and Nordstrom initially announced they were furloughing employees, a temporary layoff where workers aren’t paid but usually keep their health insurance. But now some of those furloughs are becoming permanent layoffs. MGM Resorts just warned it might make its furloughs permanent as well if businesses does not rebound this summer.
A new report from the Becker Friedman Institute at the University of Chicago predicts 42 percent of the recent layoffs from the pandemic will result in permanent job losses. There are two big issues: First, many companies are going bankrupt or shutting down permanently, so they won’t need workers. Second, even after parts of the economy reopen, many people will be hesitant to shop, travel, and go out to eat as they did before. Businesses operating at half capacity or switching to online or takeout don’t need nearly as many workers.
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‘‘Even if a miracle cure falls out of the sky in July, it’s going to take demand a while to pick back up,’’ said Betsey Stevenson, an economics professor at the University of Michigan. ‘‘There’s no way travel or retail look the same and brings everybody back.’’
Typically, fewer than half of laid-off workers expect to return to their previous job, but there’s hope this time could be different, since many business shutdowns are likely to be temporary, said economist Till von Wachter of the University of California at Los Angeles.
‘‘Helping workers keep attached to their prior employers could speed up the recovery,’’ said von Wachter.
Economists have urged companies to furlough workers instead of laying them off, since a furlough allows for some sort of employer-employee relationship to remain even though a worker is no longer going to the job. Mogna has been able to keep his employer-sponsored health insurance. He has had to make his monthly payments, but it’s been a big help to know he has the same insurance during a global pandemic.
Layoffs and furloughs skyrocketed in mid-March and have kept climbing as some businesses that initially tried to stay open found it was impossible. Americans still widely oppose reopening most businesses and remain hesitant to go to stores and restaurants.
Unease is rising among many of these jobless workers as they approach nearly two months out of a job. Roughly 1 in 4 laid-off workers say they will be in ‘‘real financial trouble’’ in less than a month if nothing changes. Among those laid off, 43 percent say the outbreak has been a ‘‘serious source of stress’’ in their life, compared with 29 percent among other Americans, the Post-Ipsos poll finds.
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