In this downturn, job losses hit white-collar Minnesota workers hard

Andrea Yoch's expertise is persuading people to show up for large gatherings. The self-employed marketing consultant in St. Paul has done just that for the Ryder Cup, Twin Cities Summer Jam and soccer matches across the country put on by the International Champions Cup.

"My entire existence is telling people to gather in groups of 10 or more, or even tens of thousands or more," Yoch said.

That work is, of course, on hold indefinitely.

So is the work of thousands of white-collar professionals — especially freelancers — who hustle in the background of a vast commercial ecosystem that has ground to a halt in Minnesota and across the country.

More than 3.3 million Americans filed for unemployment last week, a spike in joblessness that is nearly five times the weekly record set in 1982. More than 200,000 Minnesotans have filed for unemployment insurance since March 16, a number that does not capture any of the independent contractors whose business has dried up.

Restaurant and retail workers were the first to be hit and remain the largest group among those filing for unemployment insurance in the state, but the economic damage reaches far beyond them.

Hiring for most firms is frozen and corporate recruiters are losing their jobs. Promotional firms are going dark. Office bookkeepers are being furloughed. Marketing, public relations and advertising budgets are on hold.

Isaac Cheifetz, a recruiter who specializes in placing technology executives, said he is staying off the phone. He is home, reading historical biographies and trying to teach himself the coding language Python.

Companies will start hiring again once the shock of the downturn wears off, he said, but trying to drum up new business doesn't make much sense right now.

"Do you make a hire off of Skype at the VP level?" Cheifetz said. "And then, what, do you FedEx them their work?"

Contractors have seen a drop-off in inquiries and companies have started laying people off.

Veronica Jacobsen, a part-time bookkeeper for a remodeling company in the Twin Cities, said she was in a meeting last Friday where executives said they would stay the course despite concerns business would decline and workers wouldn't be able to work at job sites.

"Monday afternoon I had an e-mail saying I was furloughed," Jacobsen said. "I wasn't in the office on Monday to know exactly what happened."

She typically works on invoices from subcontractors and integrates them into the books of the company. She acknowledges the problem may be there will be no invoices to handle in the coming months.

She worries that, since hers was one of the first jobs eliminated, it may be a while before she gets back to work.

"If they have a hard time winding back up — I was first out," she said. "I worry about being the last one brought back in."

She applied for unemployment benefits and said she will "play it by ear" over the next few weeks. She is not applying for a new job immediately.

Brandon Warner is an operations analyst who plans manufacturing capacity for Merchology, a company that produces branded apparel and other promotional products. The firm has production facilities in Minnetonka and Reno, Nev.

"This first quarter was beating our projections. It was really the first week of March you could see things dwindling," Warner said.

He took a long weekend the first weekend of March and, when he returned to the office, found business was "cratering."

A shutdown in Nevada and the closure of restaurants and bars in Minnesota accelerated the decline. Warner was furloughed.

His wife works in a nonprofit and though she has kept her job, her salary has been cut. Warner isn't sure if he will apply for a different job.

"It's really day to day," he said. "At this point, how does the hiring process even work?"

Minneapolis is full of advertising firms that serve the large companies in the Twin Cities, and with marketing budgets eliminated in the near-term, they are facing difficult decisions about how to keep paying workers with less revenue.

A national survey a week ago from Fishbowl found that two-thirds of advertising professionals feared layoffs. Job cuts have occurred in at least one firm, but most of the loss of work has fallen to freelance workers, said Dean Broadhead, CEO of Broadhead, a creative agency in Minneapolis.

"We're definitely tightening down on nonemployer-related expenses," Broadhead said. "Clearly we're saving on meals and travel and entertainment."

Closer to the end of the second quarter, clients may start cutting budgets more dramatically, but it's too early to know, Broadhead said.

"We need to focus our resources as inwardly as possible, because no one knows if you're going to have a long winter," he said. "It's going to be a challenge for some freelancers."

Independent workers like Yoch, who can't apply for unemployment benefits, have seen work disappear in a way that wasn't as pronounced after past disruptions.

"Even after 9/11, which was horrible, sports resumed after a few days," Yoch said.

Not so as the coronavirus spreads. The return of sports is as uncertain as everything else. The latest estimate from Gov. Walz is that the number of COVID-19 cases in Minnesota will peak in August.

"I would love to say people are overreacting, but if the money's not coming in, the money can't go back out again," Yoch said. "I think people are doing what they need to do."

Adam Belz • 612-673-4405 Twitter: @adambelz