I can barely type fast enough to keep up with the adverse impact on the economy or freedom. Can barely keep up with the news about entire sectors of the economy collapsing. Most recent sectors I’ve learned about: airlines and the entire health care system. Since drafting this post last evening, learned about the destruction in the clean energy industry and saw some stats on the devastation in the restaurant sector.
Airlines
4/20/20 – NewsMax – Big 3 US Airlines May Cut More Than 100,000 Jobs by Fall – At the moment passenger loads are frightening – article says domestic flights are averaging 10 passengers and international flights are averaging 24 people plus crew.
One analyst estimates airline revenues may not recover to the pre-pandemic days until sometime in 2025, five years from now.
Terms of the bailout from Congress prohibit layoffs until September 30. One analyst estimates the airlines could shed anywhere from 800 up to 1000 aircraft. The resulting drop in employment will be something in the range of 100,000 staff. That is somewhere around one fourth of the people who work for the airlines industry-wide.
Compounding the job loss will be airport employees, ground transportation to and from airports, food suppliers, restaurants, and jet fuel refiners.
4/20/20 – CNBC News – United Airlines posts $2.1 billion loss on coronavirus hit, seeks more federal aid – Loss for the first quarter was $2.1 billion. Keep in mind during that timeframe the airlines were still flying full schedule for a short while, moderate schedule a while, and bare bones passenger load for a while. Second quarter results will reflect the previously mentioned 10 passengers per plane for three full months.
Hospitals
4/20/20 – The Spokesman-Review – COVID 19 put rural hospitals in Eastern Washington on brink of financial collapse – The ban on “non-essential” medical care means that small, rural hospitals in Eastern Washington have seen most of their income stream disappear. Many of the hospitals may have to close the doors.
4/19/20 – Wall Street Journal – Sending Hospitals Into Bankruptcy – Medical procedures being postponed across the country because they are “non-essential“ include:
- Hip and knee replacements
- Mastectomies
- Chemotherapy treatment
- Screening mammograms
- Screening colonoscopies
That does several things. The immediate visible impact is hospitals lose a huge portion of the revenue stream for ongoing major treatments. Surgeons and anesthesiologists loose their revenue stream too.
The longer-term invisible impact is declining health. People will be in continued pain awaiting postponed surgeries. Existing cancers will grow. Not-yet-identified cancers and other life-threatening illnesses will be missed or the detection of them will be deferred several months. Chronic conditions that require ongoing treatment and monitoring may not stay under control.
One estimate forecasts the loss of 1.5 million jobs in the healthcare sector this month alone. Several cited hospitals are cutting salaries or furloughing staff.
One large facility with 43 hospitals is furloughing everyone that is not directly helping out with coronavirus patients. A health care system in Kentucky is furloughing 25% of its staff.
Multiple additional examples are offered throughout the article.
All those furloughs, layoffs, and pay reductions represent huge volumes of patients who are not receiving care for their medical issues which are significant enough to require hospital level treatment.
This ripples out into the entire medical care system.
Restaurants
This isn’t news to anyone, but the stats are horrible to see.
4/20/20 – National Restaurant Association – The Restaurant Industry Impact Survey – Trade association surveyed 6,500 restaurant operators between April 10th and 16th. Some stats:
- 2 out of 3 employees lost their job.
- Over 8 million staff are out of work in the sector.
- Lost sales are $30 billion in March and another $50 billion in April.
- 4 out of 10 restaurants are closed.
I’m concerned about how many of those restaurants will never reopen their doors.
Clean energy
The so-called clean energy sector is collapsing.
4/20/20 – International Business Times – US Clean Energy Sector May Lose 500,000 Jobs By June Without Federal Aid – In March about 106,000 jobs disappeared. Losses are concentrated in the energy efficiency, renewables, and clean vehicles sectors.
Estimate from four activist groups is the sector could lose 500,000 jobs by June. That would be about 15% of the sector, which is estimated to employ 3.4 million people.
For perspective, the losses in March are equal to all of the new jobs created in 2019. Rephrased, all of the jobs created in 2019 disappeared in March 2020. That word picture doesn’t include April.
Entire sectors of the economy are being devastated as we watch.