May 12, 2020 - Economy & Business

The temporary pandemic layoffs that could become permanent

Illustration: Aïda Amer/Axios

Restaurant and retail workers who can't do their jobs remotely were the first to lose their incomes to the pandemic — and, for many of them, those temporary hardships will turn into lasting ones.

By the numbers: Economists at the University of Chicago project that 42% of the layoffs from the pandemic will be permanent.

  • A huge number of retailers and restaurants — especially boutiques and smaller chains — have already closed for good, unable to weather the crisis. And more will follow before the pandemic is over.
  • Even bigger chains like Macy's and Gap might not bring back all of the hundreds of thousands of workers they let go in March, experts tell Axios.
  • And the process of recalling furloughed workers will be gradual. As states start to reopen, stores and eateries will likely operate at lower capacities and only hire back a portion of staff.

The bottom line: The silver lining in last week's jobs report — the worst in U.S. history, with 20.5 million jobs shed in April — was that around 18 million of those lost jobs were just temporary layoffs. But the outlook could turn worse in the coming weeks and months.

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Mark Zuckerberg: Social networks should not be "the arbiter of truth"

Photo: Drew Angerer/Getty Images

Facebook CEO Mark Zuckerberg argued on CNBC's "Squawk Box" Thursday that social media platforms should not police political speech, and that "people should be able to see what politicians say.”

Why it matters: Zuckerberg was responding to Twitter's decision this week to fact-check a pair of President Trump's tweets that claimed that mail-in ballots are "substantially fraudulent." Twitter's label, which directs users to "get the facts" about mail-in voting, does not censor Trump's tweets.

House Democrats pull FISA reauthorization bill

Speaker Nancy Pelosi. Photo: Saul Loeb/AFP via Getty Images

House Democrats pulled legislation Thursday that would have renewed expired domestic surveillance laws and strengthened transparency and privacy protections amid broad opposition from President Trump, House GOP leadership and progressive Democrats.

Why it matters: The failure to reauthorize the Foreign Intelligence Surveillance Act (FISA) comes as Trump continues to attack the intelligence community, which he claims abused the law to surveil his 2016 campaign and Trump administration officials.

U.S. GDP drop revised lower to 5% in the first quarter

Data: Bureau of Economic Analysis; Chart: Axios Visuals

The U.S. economy shrunk by an annualized 5% in the first quarter — worse than the initially estimated 4.8% contraction — according to revised figures released by the government on Thursday.

Why it matters: It's the worst quarterly decline since 2008 and shows a huge hit as the economy was just beginning to shut down because of the coronavirus. Economists are bracing for the second quarter's figures to be the worst ever — with some projecting an annualized decline of around 40%.

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