Miller estimates that the company’s revenue
will plunge by half to three-quarters this year.
And expenses are rising because the company
must buy face masks and other equipment for
the workers it does recall and restock its food,
drink, and equipment supplies. Miller is still
optimistic that her business will, over time,
return to normal.
If many of the job losses do prove only
temporary, it would raise the possibility of
a relatively swift economic recovery. It’s
much easier for someone out of work to
return to a former job than retrain for a new
one or shift to a new industry. After the
previous three recessions, the vast majority
of people who were laid off lost their jobs
permanently. Some were essentially replaced
by new software or factory robots. In other
cases, their employers folded or entered new
lines of business.
After those recessions, the unemployment
rate took so long to fall back to normal levels
that economists began applying a chilling
label: “Jobless recoveries.”
If a substantial number of small businesses
are forced into bankruptcy, a similar dynamic
could emerge this time, economists warn.
Most job cuts by small companies in this
recession have occurred because the business
has shut down, whether by government order
or from lack of demand, according to research
released this week by Tomaz Cajner at the
Federal Reserve and seven other economists.
If those companies can’t reopen, those layoffs
will become permanent.