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As job losses mount, one industry bears the brunt of slowdown

The coronavirus-driven job numbers are bad, yet some workers are in a better position that others. The biggest loser during the pandemic? Food services.
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WASHINGTON — The economic impacts of COVID-19 become more apparent with each new set of job and sales figures, but the pain is not spread evenly. Some industries have taken much harder hits than others, leaving many people insulated from the worst impacts — at least for now.

The past week’s unemployment figures offered a glimpse at the differences. The overall numbers were stark and troubling — a decline of 20.5 million jobs for the month of April. Beneath that top number, however, there are discrepancies.

A huge amount of those losses, 38 percent of them, came in just one set of industries — leisure and hospitality, which saw 7.7 million jobs go away last month. A distant second on the list was education and health services at 2.5 million jobs lost. Professional and business services saw 2.2 million jobs go. Retail lost 2.1 million positions. And manufacturing saw a 1.3 million job decline.

Those are scary numbers for one-month drops, but for some workers they also held some good news. Yes, the COVID-driven economic hits are bad, but it seems as though some workers are in a markedly better position than others. As the old adage goes, “It's a recession when your neighbor loses his job; it's a depression when you lose your own.”

Even within the world of leisure and hospitality, the job losses are not evenly spread. Analysis from Emsi, a labor market analytics firm, shows that most of those losses came from food services.

That sector, which includes everything from full service restaurants to bars and caterers, lost 5.5 million jobs in April. Amusements, gambling and recreation lost 1 million jobs in the month. Hotels and accommodations lost about 840,000 positions. And the performing arts and sports cut 217,000 jobs.

Hotels. Restaurants. Gambling. You look at those categories and you see how a city like Las Vegas can be facing an economic catastrophe in the pandemic. But in reality, the U.S. economy is not so neatly siloed.

Industries serve one another and lean on one another. And a sector such as Leisure and Hospitality has a long reach. Emsi has quantified what the industry’s broader impacts look like. These are job losses in other industries caused just by job losses in leisure and hospitality.

More than 400,000 jobs lost in real estate; that’s sales, rentals and leasing. Manufacturing lost 184,000 jobs in April out of its connections to the world of leisure. Finance and insurance lost 109,000 jobs and the retail trade lost 71,000 positions because of the job losses in leisure and hospitality.

The numbers serve as reminder of how interdependent the sectors of American economy are. There are few, if any, completely siloed elements. And when you add in all the secondary impacts from leisure and hospitality, that initial 7.7 million jobs lost in the sector grows markedly.

In the end that tally grows to 10.1 jobs lost in the economy overall because of the losses in leisure and hospitality, an increase of about 30 percent.

The larger point is that all the pain that’s been caused by the pandemic isn’t going to suddenly stop. The job losses won’t just reach an endpoint. The longer the closures go on the larger they will reverberate and losses in one area will spread to others. And it’s not just leisure and hospitality where these domino effects exist.

Those job losses in manufacturing mean there are a million fewer people punching the clock at factories around the country. Those workers aren’t going to grab lunch at the nearby diner (even take out) which means the restaurants need fewer people to prepare food. That means the restaurants need fewer shipments of food and other goods so fewer trucker are needed to carry freight. And that freight is what would be made by another set of manufacturing plants elsewhere.

All those problems are only going to get worse as the shutdown continues and the impacts ripple out. People who feel safe in their jobs right now, may not in a month.

None of this is meant to minimize the life-and-death health impacts of COVID-19. Nearly 90,000 Americans have died so far in the pandemic, and that is with social distancing and shelter in place guidelines. Loosening those elements, will likely make the death toll rise more quickly.

But the economic impacts of the lockdown are massive and will continue even after the economy is “restarted.” People are unlikely to immediately go back to life as it was.

In fact, when you look closely at the economic impacts of pandemic — the spread, the movement from one sector to another — they hold the hallmarks of COVID-19, itself. They look like a virus that is reshaping our world and possibly our politics for the fall.