Sep 1, 2020

Axios @Work

By Erica Pandey
Erica Pandey

Welcome back to @Work. As always, send your feedback and your ideas to erica@axios.com.

✈️ If you're curious about the future of air travel, tune into the International Economic Forum of the Americas' virtual conference tomorrow. I'll be interviewing Jeff Knittel, CEO of Airbus Americas, at 10:35am ET.

Today's edition is 1,400 words — a 5-minute read. Let's start with...

1 big thing: The business of child care — in crisis

Illustration: Annelise Capossela/Axios

The child care industry is collapsing under the strain of the pandemic.

Why it matters: With parents making up a third of the U.S. workforce, the fate of schools and day care centers and the strength of the economy are inextricably linked — given that the hit to closed schools could be an estimated 3.5% of GDP.

"The child care system needs a large-scale, immediate bailout. Full stop," says Alicia Modestino, an economist at Northeastern University.

By the numbers: Without financial help, 50% of day care centers will go out of business, erasing some 4.5 million slots for young kids, the Center for America Progress projects.

  • Only 25% of child care businesses received loans under the Paycheck Protection Program (PPP).
  • Day care centers got $3.5 billion in aid under the CARES act, but economists say the industry needs around $10 billion per month to make it through the coronavirus crisis. The latest stimulus package in Congress has no money earmarked for these businesses.
  • Case in point: Mary Grimmer, who owns Little Treasures Schoolhouse, which has a few locations north of Boston, told me she went from turning an $18,000 profit in February to losing $58,000 in July. Grimmer did get a PPP loan, which softened the blow.

And even the places that are open are struggling with the additional costs and burdens of running a day care during a pandemic.

  • They've had to buy new toys because kids can't share anymore; they've taken on fewer kids to abide by social distancing rules; and they've had to hire more people to keep everything sanitized. Grimmer said she had doubled her payroll after reopening.
  • "What concerns me most moving forward is another shutdown," she says. "I could not imagine how we could survive another one."

Worth noting: Women are suffering doubly as a result of the child care crisis, says Catherine White of the National Women's Law Center.

  • If centers close and jobs are lost, it'll affect women, who represent 90% of the country's child care workers. One in five of these jobs has already been lost since February.
  • "And on the other side, women are taking on the burden of caregiving responsibilities at home," says White. "They're going to lose out most and not be able to return to the workforce if there isn’t child care available."

Go deeper: Beyond the stress of overwhelmed parents or the cabin fever of restless kids, closing schools and day cares for the pandemic could cost about $700 billion in lost revenue and productivity.

2. Tracking the jobs outlook
Data: Indeed Hiring Lab; Chart: Axios Visuals

Millions of Americans are unemployed — and desperately seeking work that just isn't there.

"There aren’t enough jobs to go around," says Tara Sinclair, a senior fellow at the Indeed Hiring Lab. "It’s like playing musical chairs, and we’ve taken a whole lot of chairs out of the circle at once."

Jobs are coming back in some industries, but the pandemic continues to hurt others — turning many temporary layoffs into permanent job losses.

The sectors driving the recovery...

  • Jobs in trucking, warehousing and e-commerce, which support the stay-at-home economy, have been relatively strong, says Jed Kolko, chief economist at Indeed.
  • "Construction is doing well, too, as people are looking for new homes or to improve their current one," he says.

...and the sectors continuing to struggle:

  • The hospitality and tourism industries as well as retail and restaurants are suffering most as the pandemic drags on. Arts, entertainment and sports, which rely on large, in-person gatherings, are also in trouble.

Trouble at the top: Tech and finance jobs aren't immune to the coronavirus either. "These higher-wage sectors might be slower to recover because they base their hiring decisions on where they expect the economy to be longer-term," Kolko tells Axios.

  • Final-year MBA students, who are usually drowning in offers by the fall, are looking at a bleak jobs landscape as many of the big consulting firms freeze hiring, reports Patrick Thomas in the Wall Street Journal.
3. Work from anywhere

Illustration: Aïda Amer/Axios

It's not about working from home anymore. It's work from anywhere.

The big picture: In yet another example of how the pandemic is exacerbating inequality, lower-income Americans are doing front-line jobs or struggling to pay the bills, while richer workers are renting serene lakeside cabins and beautiful island villas as their employers extend telework timelines through the end of 2020 and beyond.

What's happening: Offices are closed, business trips are canceled and work retreats have been indefinitely postponed. Those with jobs that can be done remotely have realized that their physical presence won't be required anywhere for months.

  • The number of Airbnb reviewers mentioning "remote working" has tripled since last year, the company says. People are booking long-term stays — 28 nights or longer — in places like Whitefish, Montana; Shenandoah National Park in Virginia; and Windsor County, in central Vermont.
    • City dwellers are trying to get closer to nature by turning parks and beaches into their offices for the day.
  • Many wealthy New Yorkers who fled the city for second (or third) homes in the Hamptons, Palm Beach or Martha's Vineyard are staying in those spots through the winter. Enrollment in the Amagansett School, an elementary school serving a hamlet within East Hampton, New York, has doubled to 150 from 75 for this fall.

Tourist destinations are attempting to get people to take a yearlong, working vacation.

  • Barbados and Bermuda are offering telework visas.
  • And resorts from Hilton Head, South Carolina, to Punta Cana in the Dominican Republic are whipping up special remote work and remote learning packages for families.

College students are part of the trend, too, the New York Times' Taylor Lorenz writes.

  • With scores of universities pursuing online learning this fall, groups of kids who don't want to be stuck at home with their parents are renting houses in places like Montana or Hawaii to do Zoom school together.
  • "These houses range in scale from lavish and pricey productions to smart, budget-friendly solutions for first generation, low-income students," Lorenz notes.
4. The trouble in college towns

Harvard Square in Cambridge. Photo: Lane Turner/The Boston Globe via Getty Images

Speaking of remote learning, small businesses and workers in college towns are hurting as the pandemic pushes universities to go online.

The big picture: Hundreds of local economies across the country rely on the annual influx of students and professors to stay afloat.

Businesses in college towns are 24% more likely to shutter permanently than their counterparts in other towns, per new Yelp data.

Among the hardest-hit places...

  • College Park, Maryland (University of Maryland), saw 4.4% of businesses close for good.
  • Berkeley, California (University of California, Berkeley), 4.2%.
  • Cambridge, Massachusetts (Harvard and MIT), 3.8%.

Go deeper: College reopening plans are crumbling

5. Worthy of your time

Illustration: Sarah Grillo/Axios

The facade of amateurism in college sports (Axios)

  • If football and men's basketball players at Power 5 colleges were paid under collective bargaining agreements like their professional peers in the NFL and NBA, they would earn annual salaries of $360,000 and $500,000, respectively.

Corporate America's coronavirus gag rules (Bloomberg)

  • Bloomberg's Josh Eidelson investigated complaints filed with the National Labor Relations Board and the Occupational Safety and Health Administration and found that hundreds of U.S. employers have silenced their workers, forbidding them to talk about outbreaks at work and retaliating when they do.

Why ventilation is key in preventing COVID-19 (Wall Street Journal)

  • If we ever want to return to offices and classrooms, we need to understand that strong ventilation is as vital for safety as handwashing, masking and social distancing. The Journal illustrates how it works.

The coronavirus is ravaging the school bus industry (New York Times)

  • As the pandemic keeps schools closed, privately owned bus companies — which bring 10 million kids to school a year — are bleeding out.
6. 1 good thing: Commuter calculus
Data: Upwork and U.S. Census Bureau; Chart: Axios Visuals

Commuting was costing American workers an increasing amount of time, money and life satisfaction. After a glimpse of life without the daily slog, workers may not want to go back to normal, which could have major effects on cities around the country, writes Axios futurist Bryan Walsh.

By the numbers: In a survey released last week, the freelancing platform Upwork found that those working remotely because of COVID-19 were saving an average of 49.6 minutes a day because they were no longer commuting.

  • For the majority who commuted by car, staying off the roads has saved $758 million a day in time, fuel and health costs, which adds up to more than $90 billion since mid-March.
  • This change comes after years of ever-lengthening commutes, which had increased by an average of almost 11 minutes a day since 1980, or two full days a year.

The bottom line: Those savings are one reason why many surveys — like this one from the New York Times — have found that most workers are quite satisfied with working from home.

Erica Pandey

Thanks for reading!