As the days go by without another round of coronavirus economic stimulus, we’re starting to see more job cuts. The question now is just how bad the economy will have to get before lawmakers finally decide to start working together.
Massive job cuts without coronavirus economic stimulus
A key deadline for job cuts is coming, which means lawmakers should figure something out for coronavirus economic stimulus before then. That date is Oct. 1, and it's when airlines across the country will start laying off employees because their stimulus funds have run out.
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American Airlines said on Tuesday that it will place 19,000 employees on furlough on Oct. 1 if lawmakers don't come up with more funds and another coronavirus relief package. The airline said there's been no sign that people are less hesitant to travel due to the ongoing COVID-19 pandemic.
American is preparing to cut thousands of pilots, gate agents, flight attendants, technicians and other staff members. Including retirements, buyouts and leaves of absence, the airline expects to reduce its employee count by about 40,000 on Oct. 1. American plans to cut its global workforce by 30% since before the pandemic.
Other airlines also cutting jobs
American Airlines isn't the only one making job cuts due to the lack of new coronavirus economic stimulus. United Airlines said earlier this summer that it might place up to 36,000 workers on furlough in the fall. On Monday, Delta Air Lines said it could have to furlough up to 1,941 pilots on October after almost the same number accepted buyouts.
The New York Times reports that the airlines are using job cuts to pressure the White House and Congress to strike a deal on more coronavirus economic stimulus. Legislation passed in March earmarked $25 billion to passenger airlines to help them pay their employees. American received $5.8 billion of those funds.
Job cuts elsewhere due to lack of coronavirus economic stimulus
There are warning signs that other parts of the economy could see widespread layoffs too due to the lack of a coronavirus relief package. The jobs report showed that hiring slowed last month, and there are signs that it slowed even more this month.
More than 1 million people are filing for unemployment every week, marking a significant increase again after declines. Further, Tuesday brought data indicating that consumer confidence plunged to its lowest level in August since the pandemic started.
Economists blame the lack of coronavirus economic stimulus for the job cuts and slowing economy. The extra $600 in weekly unemployment benefits that was approved in March was allowed to expire at the end of last month. The Paycheck Protection Program ended this month.
Lawmakers' inability to strike a deal on a coronavirus relief package also means there have been no more stimulus checks, and the first $1,200 that was sent to individuals is long gone in most cases.