Amid the Coronavirus Outbreak, Some Businesses Flourish
For most areas of the economy, the fallout from the coronavirus has been devastating. Dozens of states have issued sweeping shelter-in-place orders, forcing businesses to shutter, at least temporarily.
As a result, nearly 10 million Americans have filed for unemployment insurance, including 6.6 million in the last week of March alone.
Unemployment Insurance Weekly Claims
Initial claims were 6,648,000 for the week ending 3/28 (+3,341,000).
Insured unemployment was 3,029,000 for the week ending 3/21 (+1,245,000).https://t.co/ys7Eg5LKAW
— US Labor Department (@USDOL) April 2, 2020
But in the midst of this crisis, some parts of the service industry are flourishing. Suddenly deemed essential, they’re even hiring en masse.
What Types of Businesses Are Doing Well?
Since the pandemic reached the U.S., The Penny Hoarder has tallied more than 700,000 new job openings. Here’s how certain industries are responding to a surge in demand, even as the overall economy screeches to a halt.
When daycares, schools, bars and offices send everyone home, commercial cleaning businesses gear up. The workers don gloves, masks, goggles and other protective gear.
Cleaning businesses can’t perform their services with people around, meaning a glut of empty buildings is a good thing. Federal guidelines designate commercial cleaning as an essential service amid the outbreak.
“The cleaning supply chain from manufacturers down to cleaning service providers were included in that guidance,” according to ISSA, the Worldwide Cleaning Industry Association.
As the Los Angeles Times points out, “deep cleaning” doesn’t mean very much. It’s not a technical term. But that isn’t stopping customers from requesting deep cleaning services to calm their minds. A regional cleaning business in Arizona, California and Nevada told the L.A.Times that it’s receiving about 100 calls a week requesting coronavirus deep cleans.
The term makes the public “feel warm and fuzzy,” one cleaning-business owner said.
Delivery and Transportation
As a result of sheltering at home, more Americans are shopping online. Items are flying off the virtual shelves, maybe out of necessity, panic, boredom or a mixture of all three.
Amazon, DoorDash, Instacart and Postmates have reported huge increases in online orders in the past few weeks. To reduce the spread of the disease, major food-delivery apps rolled out new features that allow customers to request contactless deliveries at the touch of a button.
In mid March, Amazon announced it’s hiring 100,000 new part-time, full-time and gig workers across all distribution centers and delivery networks. The company temporarily increased pay by $2, bumping its minimum wage to $17, and said that all workers, including gig workers, are eligible for two weeks of paid time off if they are diagnosed with COVID-19 or are told to quarantine.
Grocery delivery app Instacart is bringing on 300,000 full-service shoppers. These gig workers take orders through a smartphone app, shop at a local market and deliver the items directly to the customer. Full-service shoppers are considered independent contractors and don’t receive typical benefits, though the company enacted a similar sick leave policy to Amazon’s for workers who contract the coronavirus.
Workers for both Amazon and Instacart staged strikes across the country on March 30 to demand better pay, protection and benefits during the outbreak. Instacart didn’t concede hazard pay or additional sick-leave benefits but said it will start sending its shoppers masks and cleaning supplies.
Grocery and Convenience
Since the national emergency announcement from President Trump, consumers have been flocking to their local supermarkets to stock up. Media reports show rows and rows of empty shelves, especially in the toilet paper and cleaning-supplies aisles.
Grocers and retailers have had to go into hyperdrive to keep up.
The Penny Hoarder confirmed that 7-Eleven, Albertsons, Kroger, Publix and Walmart are all recruiting. Shelf stockers, cashiers and warehouse workers are in high demand. To entice new workers, many of those employers now offer paid sick leave under certain coronavirus-related conditions.
All Kroger Co. stores, including Baker’s, City Market, Fred Meyer and Owen’s, are offering additional “hero pay” to their employees, a $2-an-hour boost. Walmart and Sam’s Club also raised hourly pay by $2.
Restaurants — Some of Them
Overall, restaurants have taken a beating. Dining out is mostly a social experience, and with social distancing measures in effect, dining rooms have had to shut down.
Some nimble restaurants have ramped up their takeout operations in response. Food delivery apps have played a part in their success, waiving delivery fees. But it’s really the restaurants that already had the delivery infrastructure in place that are shining now.
In total, the companies have 60,000 new openings. Papa John’s, for example, reported to the SEC that it employed approximately 16,500 workers in the fourth quarter of 2019. To keep up with coronavirus demand, it’s adding another 20,000, more than doubling its workforce.
Reality of Service-Industry Gigs During the Pandemic
While white-collar employees are better suited to work remotely, blue-collar workers are toiling on the frontlines during the pandemic – often without benefits.
Service-industry jobs are historically low paying and typically don’t come with paid sick leave and health insurance. Many W-2 employees get only what’s required by law: workers comp, OSHA protections and eligibility for Social Security and unemployment insurance.
Gig workers, on the other hand, receive even less because they’re classified as independent contractors, meaning the company isn’t technically employing them.
“During this pandemic crisis, those who have been told they’re self employed, their employer hasn’t been paying into unemployment insurance or workers compensation or providing them with sick leave,” said Lawrence Mishel, a senior labor-market economist at the Economic Policy Institute, a pro-labor think tank. “They are very vulnerable to losing their job and getting sick.”
New emergency legislation aims to remedy those issues.
- The Family First Coronavirus Response Act provides paid sick leave for the coronavirus and extends family medical leave benefits. But there are loopholes. Businesses with less than 50 employees can be exempt, and the law doesn’t apply to businesses with more than 500 employees (read: all of the companies mentioned above).
- The $2 trillion federal stimulus package beefs up unemployment insurance programs and, for the first time federally, establishes new unemployment benefits for gig workers through Pandemic Unemployment Assistance.
For Some Workers, a Newfound Appreciation
It’s not all doom and gloom. Amid the frustration and anxiety, some service workers are receiving newfound appreciation from the public.
When a $66 Instacart order blipped onto the phone screen of Jacob Howell, a shopper from northern Virginia, he “jumped on it immediately because that’s what you do,” he told The Penny Hoarder.
In Howell’s area, most orders are low paying and have tiny tips – “you would probably be a little offended” if you saw how low the pay is, he said. Because of grocery shortages, many orders include items that need to be substituted or refunded. Sometimes the entire order has to be canceled. It requires a lot of communication with the customer. For this order, Howell said the customer “was very bummed about the balloons I had to refund.”
He knew it was for a family. Instead of giving up, he decided to drive to a different store in search of a similar pack of balloons. “Walmart was on my way, and I just picked some up and put them in with the groceries” as a surprise.
The customer was ecstatic and left him a $70 tip, plus a glowing review:
“I hope this gets shared with Jacob so we know how grateful we are for his efforts and thoughtfulness. The additional effort blew us away. Thank you so so so much,” the review stated.
“I understand the panic, that’s why I did it.” Howell said. “Food is out of stock and I’m okay with refunding that, but balloons are balloons.”