|Workers in the limited- and full-service restaurants will be most affected with some 9 million jobs at risk of layoffs. / Photo by CandyBox Images via Shutterstock|
Some 37 million jobs in the United States are now vulnerable to layoffs because of the sudden halt of business activities in states, municipalities, and cities to lessen the spread of the coronavirus. This is based on the estimates provided by the U.S. Private Sector Job Quality Index (JQI).
At-risk jobs in the US
In a statement published by the JQI team, it said that workers in the limited- and full-service restaurants will be most affected with some 9 million jobs at risk of layoffs. The report details the following fields that are at risk during the coronavirus crisis: gasoline stations (798,000), general merchandise stores (2.8 million), employment services (3.4 million), business support services (749,000), travel arrangement and reservation services (178,000), museums, historical sites, and similar institutions (137,000), amusements, gambling, and recreation industries (1.5 million), education (3.2 million), special food services (629,000), drinking places – alcoholic beverages (342,000), cafeterias, grill buffets, and buffets (102,000), and snack and nonalcoholic beverage bars (649,200).
It also includes workers in membership associations and organizations (2.4 million), other motor vehicle dealers (132,700), auto parts, accessories, and tire stores (474,400), furniture stores (184,300), home furnishing stores (211,800), building material and supplies dealers (959,400), lawn and garden equipment and supplies stores (129,500), clothing stores (799,400), shoe stores (143,900), jewelry, luggage, and leather goods stores (97,300), sporting goods and musical instrument stores (396,300), book stores and news dealers (68,400), florists (49,300), office supplies, stationery, and gift stores (183,400), used merchandise stores (152,700), other miscellaneous store retailers (289,500), the lessor of real estate (481,100), offices or real estate agents and brokers (268,700), performing arts companies (114,500), spectator sports (124,500), agents, promoters and managers of arts, sports, and similar events (152,300), traveler accommodation (1.7 million), RV parks and recreational camps (56,900), auto repair and maintenance services (774,400), personal care services (631,600), and dry-cleaning and laundry services (254,300).
Jobless claims that may reach 2.25 million
Economists are preparing for a “wave of job losses” that could increase the number of claims for jobless benefits. Investing banking company Goldman Sachs’ economist David Choi said that the initial claim for the week ending March 21 could rise to 2.25 million. He based his analysis on recent news reports and anecdotes.
The initial jobless claims in the US increased from 70,000 to 281,000, the increase was attributed to the coronavirus outbreak and the highest record in 2.5 years. Choi added that even if the most conservative estimate of jobless claims will still reach more than 1 million. Consumer-facing businesses are also expected to have revenue declines.
Different states have likewise reported a massive increase in the number of applicants for jobless benefits. These people receiving unemployment benefits in the United States could blow past the 2009 record of 6.6 million jobless benefit applicants.
|Consumer-facing businesses are also expected to have revenue declines. / Photo by Larina Marina via Shutterstock|
The possibility of exceeding the effect of the Great Recession
Great Recession is an economic depression or downturn from 2007 to 2009 after the global financial crisis and the bursting of the housing bubble in the United States. It was the most severe economic recession in the US since the 1930’s Great Depression. However, the impact of the coronavirus pandemic may exceed the Great Recession or a period of a marked general decline in the US.
University of Vermont’s retired associate professor of economics Art Woolf opined that the coronavirus job loss would possibly be the largest and fastest employment decline in the history of Vermont (US State) and it could even exceed the Great Recession. By May, Woolf expects more than 8% of job loss in the state compared to the 4% job loss during the Great Recession. The 4% job loss unfolded over two and a half years whereas the coronavirus job loss would possibly happen only in three months.
In Vermont, there are 20,000 jobs in restaurants and bars but these establishments can only provide takeout services. There will be no need for bussers and waitstaff and restaurants won’t need as many dishwashers and cooks as before, depending on the type of restaurant. He forecast that the overall employment in the restaurant industry in Vermont state will decline by 50%.
Inns, motels, and hotels employ nearly 15,000 in their state. Although April and May are not significant months in the tourism industry, business travelers and other tourists won’t be visiting the state than they normally do. His forecast for the hotel industry would be an 80% job loss by the end of spring. Companies in the services sector will also be affected, particularly in retailing. Retail firms L.L.Bean and REI have announced a total shutdown on all of their brick and mortar stores in the country. Other chains would probably follow suit or, at the very least, cut their staff or hours of working. This means at least 5,000 people would be losing their jobs as sporting goods, clothing, furniture, and other stores would also reduce their costs because of the decline in sales.
Coronavirus job losses may further affect employers in the manufacturing industry because of public health reasons. The big three automakers in the US (Fiat Chrysler Automobiles, Ford Motor Company, and General Motors) are closing their plants. Toyota, Honda, and Nissan also announced some closures. In effect, businesses that are supplying parts to these firms would be shutting down or reduce their employment. On the other hand, retail companies Walmart and Costco have increased their hires to deal with the increasing number of sales in local supermarkets. Logistics company United Parcel Service (UPS) and multinational delivery services company FedEx are likely to add employees too as more people are now buying goods online. “I hope I am wrong,” Woolf said.
US employment, by major industry sector
The US Bureau of Labor Statistics reports the employment statistics by major industry sectors in 2018. The figures herein represent thousands of jobs: Goods-producing, excluding agriculture (20,661.3), construction (7,289.3), mining (683.3), Manufacturing (12,688.7), Retail trade (15,833.1), Transportation and warehousing (5,419.1), Professional and business services (20,999.5), Educational services (3,727.5), Health care and social assistance (19,939.3), Leisure and hospitality (16,348.5), Other services (6,622.4), Services-providing excluding special industries (129,142.4), Agriculture, forestry, fishing, and hunting (2,310.0), Agriculture wage and salary (1,547.2), Agriculture self-employed (762.8), and Nonagricultural self-employed (8,924.0).
The coronavirus is posing evolving risks not only to the US but other countries’ economic activity. If people are going to overcome the challenge and avoid recession, the job market should remain strong though a slow job growth is expected.