Illinois and Chicago Area Suffering Massive Job Loss Following the Start of the COVID-19 Pandemic
By Corinne McDonald and Sal Lopez
In the year leading up to the COVID-19 outbreak, many doubts persisted about the state of the economy. Although the economy was beginning to slow, morale was high among many that 2020 would be the year to revive the booming U.S. economy.
Throughout 2019, consumer sales even hit an annual record high at $13.28 trillion, according to the Bureau of Labor Statistics.
The transition in the U.S. economy, including the impact on local and state government, was drastic and timeless. In the second month of 2020, the unemployment rate across the country hit a record low after 50 years, leading to roughly 20.5 million jobs being lost by April of that same year, according to the Bureau of Labor Statistics.
It is well known the effects of COVID-19 and what it can do to someone’s body. However, this virus also has influence on the economy in a significant way. Businesses had to close their doors, causing many people to be without a job. Many Americans live paycheck to paycheck and need an income to pay for basic necessities.
As of November 2020, 4,993 Chicago businesses had to close their doors either for good or temporarily, all within a three-month period, according to the Chicago Tribune. Restaurants closing down had one of the biggest impacts from the virus. A total of 638 restaurants were closed according to Yelp.
One local restaurant in the loop, Capriotti’s Sandwich Shop, had to close their doors for a few months due to this worldwide pandemic.
A Senior DePaul student, Nubia Ramirez, worked a part time job at Capriotti’s to have money to pay off her student loans and car payment. However, due to the closing of the restaurant in March of 2020, she was worried she was not going to be able to pay her bills.
“I remember my co-workers and I were talking about how we were afraid that we were going to close down as well as the other businesses, and just talking about how this virus is changing the lives of everyone,” Ramirez said. “Not only do us co-workers lose our jobs, but since our restaurant is owned by small businesses owners, they are affected detrimental to them and their families as well. One of the owners recently became a first time father and we know how much this is hurting him financially.”
Even when restaurants are opened, there are many restrictions that need to be followed. In the worst moments of the pandemic, these businesses were considered in Phase 4. This entailed a list of newly implemented rules that businesses needed to follow in the midst of the pandemic.
A six-per-table rule was issued at restaurants. Businesses were forced to put a cap number of people inside, so lines tended to form outside.
Business hours were restricted, so less employees were working, or their shifts were less hours. Ultimately, despite restaurants opening back up, they are not bringing in the business that they saw prior to the pandemic.
In an attempt to combat this growing issue for restaurants throughout the city, Chicago began giving permits to businesses that allowed them to extend their seating onto the sidewalk. These sidewalk permits played a role in allowing restaurants to reopen through the summer months. The permits were valid from March 1st, 2020 to December 1st, 2020.
Despite the efforts by the city, the economy overall was taking a hit in the months following the start of the pandemic. In a study it showed that Chicago was affected more financially than the nation itself. In Chicago roughly 50% of households reported that they were facing serious financial problems whereas the nation was reporting at 46%. Half of the households in the largest four cities here in the US have lost jobs, wages or savings, according to an NPR story.
According to the US Bureau of Labor Statistics, Chicago-Naperville-Elgin’s employment went from 4,430,400 all the way down to 366,600 all within a year. This is a huge downfall when it comes to people being without a job.
The Federal Reserve Bank of Chicago has been impacted by the local and state regulations that were put on businesses, primarily in the Chicago area. Illinois, Indiana, Iowa, Michigan, and Wisconsin are the five district states affiliated with the Federal Reserve Bank of Chicago who reaped the repercussions of the devastating impact of COVID on a major city such as Chicago.
With an already poor history of fiscal management, Illinois has a credit rating that is among the lowest in the country. While most states maintain a ‘rainy day fund’ which is used in natural emergencies and recessions, Illinois has failed to do so which has prevented the state from implementing additional measures to restore the economy in Illinois.
For this reason, Chicago Federal Bank President Charles Evans told the New York Times that the system within Chicago Federal Bank and the five states associated with it is too broken by the coronavirus pandemic to fix itself. With an already struggling economy in the Midwest, Evans points to congress to aid the Federal Reserve during this recession.
Many Chicagoans were personally impacted by the amount of jobs that were eliminated following the coronavirus pandemic.
Nicholas Cerep, a senior at the University of Pittsburgh, was scheduled to start a supply chain internship with Schneider International in downtown Chicago. He was set to start in May of 2020 before learning of his internship being canceled in the weeks leading up to the start date.
“The company explained that they were forced into making business critical decisions because of the pandemic and uncertainty of business going forward,” he said. “Although I understood the decision and the basis for it, this late cancellation was detrimental to my ability to gain real world experience in the summer of 2020.”
“Since I had accepted this offer, I turned down multiple requests to interview at positions I was interested in and potentially declined multiple other employment opportunities.”
Not only were jobs taken away from those with years of experience in the industry, but even for those about to enter their first professional position or experience were stripped of the opportunity. When assessing the overall impact of coronavirus on the unemployment rate in Chicago, the virus set back plans for many to move into the city, look for a job in the city, or find mobilization within the large corporations headquartered in the city.
Nicholas further noted, “This virus has impacted so many parts of our lives, but it really set back my development and ability to earn an income.”
