Mary Aaron returned to her office last Wednesday after several weeks of working from home – to clean out the desk she had occupied for 20 years as a senior art director at a San Antonio advertising firm.
Like tens of thousands across the city and state, Aaron had joined the ranks of the unemployed, a group that has swelled to historic proportions as an economy-crushing pandemic rippled across the nation.
Though the U.S. jobless rate for May, down to 13.3 percent from 14.7 percent in April, signifies the labor market may be rebounding, economists warn the trend may not last and has a long way to go before matching pre-pandemic numbers (4.4 percent in March).
As one of six employees laid off by the Northside agency in May, Aaron, who was in the midst of work on a logo design for an economic development office when she got the call, bears no ill will against her former employer.
“I’m sure it was just a survival thing,” she said. “ … I’ve seen where we’ve gotten very lean and times where we’ve had to cut back. So I think if they could have brought me back [from furlough], they would have.”
For the state’s 2.3 million jobless, this week’s announcement from the Department of Labor that unemployment benefits would be extended an additional 13 weeks brought some measure of relief. Since March 13, the Texas Workforce Commission (TWC) has paid out $9.7 billion in benefits using state and federal funds.
But the additional $600 a week in federal aid that was added to unemployment benefit checks with the passage of coronavirus relief legislation will come to an end July 25. And a still-lingering concern for many unemployed people, and the agencies that support them, is the issue of when TWC commissioners will reinstate work search requirements that were waived under the Gov. Greg Abbott’s disaster declaration on March 17. Will there be jobs to apply for?
“That’s going to be the challenge and that’s what … the general public needs to understand,” said Adrian Lopez, CEO of Workforce Solutions Alamo (WSA), which serves job seekers in Bexar and 12 surrounding counties. Though additional aid may be coming from other entities, Lopez worries it won’t last, and job seekers could come up empty in their searches as well.
“There may not be the jobs that existed 10 or 11 weeks ago … they’re eliminated,” Lopez said. For that reason, the sooner people begin looking, the better, he added. “Because those that don’t engage soon may literally be on the outside looking in, at some point in the future.”
In April, WSA was tracking over 56,000 job postings in the 13-county region, Lopez said, with the greatest number of listings being for registered nurses, software developers, customer service and sales representatives, and manufacturing roles. In March, there were over 71,000 job listings.
But nearly 200,000 people have filed for unemployment benefits in the region, and those are just the ones who were successful in filing a claim. Lopez said he does not know for sure how many have not been able to file yet due to TWC’s overloaded systems.
For the thousands who have been laid off from industries that were hardest hit – accommodation and food services, especially – finding a new job may mean looking for something different.
“Industry folks are telling us that 25 to 30 percent of those jobs are no longer going to come back,” Lopez said. “That means about 15,000 folks or so that are potentially not going to have a job … if they don’t reengage and upskill and retrain into something else other than where they came from.”
Unemployment data also shows that layoffs occurred in greater numbers among those who have lower levels of educational attainment, and thus may lack the training and skillset to easily transition to another industry or job.
In the WSA region, well over twice the percentage of unemployment claims were filed by those with a high school education over those with at least one year of college. The age group with the highest jobless claims was in the 25 to 34 range.
In total, business shutdowns and the coronavirus pandemic have led to more than 130,000 Bexar County residents filing for unemployment benefits since early March.
On Thursday, City Council approved a $191 million local recovery plan that includes $75 million for workforce development programming.
Economist Keith Phillips, assistant vice president at the San Antonio branch of the Federal Reserve Bank of Dallas, said that he expected San Antonio’s unemployment rate to be worse than it is, given its large share of tourism-related jobs. But while the city’s unemployment rate has remained lower than state and national figures, bouncing back from such a “shocking” blow could be harder.
“This was not like an oil price shock or a housing crisis,” Phillips said of the virus’s economic impact. “This was shutting down everything. It was a necessary thing to fight off the spread and the growth rate has dropped sharply. [But] the economics is quite different than normal.”
That has made forecasting, based as it is on historical data, especially difficult for economists like Phillips. But as Texas reopens, he sees a continued moratorium on large gatherings for sports and performing arts events that generate sales at restaurants and hotels as having a negative effect on San Antonio’s employment numbers even as the overall economy improves.
The fact that San Antonio’s overall wages are usually lower than other Texas cities may also hurt the effort to bring people back into the workplace, Phillips said, if those who are making more in unemployment benefits than they were on the job are reluctant to return.
For Aaron, who lost an longtime friend to COVID-19 early on in the crisis, the coronavirus has dealt a double blow. Laid off after a long career in advertising, she is collecting unemployment benefits, and may apply for other jobs. But she is also considering working as a freelancer. “Right now, I’m still in a bit of shock, but I have avenues,” she said.
Aaron’s former boss, Anderson Marketing Group President and Owner Kim Gresham, said clients began reducing ad budgets in mid-March. When several retainer agreements weren’t renewed, that’s when the three agency owners, who have also taken salary cuts, decided layoffs were unavoidable, if not easy.
“We are a close-knit group, and at the agency, we work long hours together so they’re kind of like family to us,” she said.
Gresham is optimistic, however, that clients will be knocking on the agency’s door again soon. The company is marking its 50th anniversary this year.
“Our business is driven by other businesses in their advertising, so when advertising dollars get pulled back, we’re impacted tremendously,” she said. “Things are lightening up a little bit. We’re seeing more spending going on … but it’s going to be a slow rebound.”