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In
the massive job reshuffling under way in the United States right
now, the speed with which corner restaurants, the local barber
or the yoga studio up the street can climb back to normal from a
dead stop in March and April will be one key to whether the
coronavirus leaves a lasting gash in the economy.
(Graphic: The rebound from zero - https://graphics.reuters.com/GREAT-REBOOT/DATA/yzdvxqaqlpx/chart.png
Those industries may seem trivial in an advanced country where
attention focuses on the latest high-flash technology helping
people work from home.
They aren't. In the decade-long economic expansion that ended in
February, restaurants, hotels, and personal service firms played
an important role.
(Graphic: Employment 2010 vs. 2019 - https://graphics.reuters.com/USA-REBOOT/DATA/xlbvgjwwjpq/chart.png)
Some industries grew more.
But the proliferation of small restaurants and similar
businesses over the last decade generated a growing share of
U.S. jobs, accounting for 11% of all jobs as of February. It was
growth, moreover, across occupations more open to the
less-skilled, helping push the U.S. unemployment rate to the
record lows it hit last year and extend the gains of that
expansion more broadly across the population.
For those firms, the wound from the coronavirus has been the
deepest by far. From February to April, the leisure and
hospitality industry lost about half of its 16.8 million jobs,
the largest decline in any of the 14 industrial categories used
by the Bureau of Labor Statistics to describe the U.S. economy.
(Graphic: Job losses February to August - https://graphics.reuters.com/USA-REBOOT/DATA/qzjvqnaogpx/chart.png)
In a viral pandemic, the very qualities that make a neighborhood
cafe cozy become a confidence breaker, so a full recovery may be
slow.
Of the roughly 8 million jobs lost in the industry, 4 million
were recovered as the economy reopened and firms found news
ways, such as outdoor seating, to rekindle business.
But that still leaves 4 million jobs "missing," and the easy
part may be over. What's worrying U.S. officials now is whether
those still-lost jobs will come back at all, or whether some
industries have been permanently downsized.
Many of the jobs at risk were in small businesses more prone to
failure for each month the crisis extends, and particularly if a
new viral wave deepens the downturn.
Many were filled by minorities, women, or less skilled workers
who following past recessions have had a tougher time regaining
a foothold in the economy.
At the start of this downturn, economists were hopeful that its
unique origins - a public health crisis that required the
economy to hibernate - could be quickly reversed. They now talk
about the risk of an extended "reallocation shock" as workers
fight to retrain, switch industries and regain their place.
Economists watch different groups of people for evidence of how
deep and permanent the scars might become. Among the most
telling are the number of people unemployed for six months or
more, and the number who have pared down their job search, out
of discouragement for example.
In the opening months of this downturn, those two groups have
grown 50%, to 3.6 million as of August - triple the rate of
increase seen in the 2007 to 2009 recession.
(Graphic: A developing job market scar - https://graphics.reuters.com/USA-REBOOT/DATA/jbyvrmxbqpe/chart.png)
(Reporting by Howard Schneider; Editing by Nick Zieminski)
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