The COVID-19 virus has not been an equal-opportunity employment destroyer
In April 2019, nearly 45,000 people were employed at full-service restaurants in the seven-county Pittsburgh area — making meals, waiting tables, washing dishes.
A year later, at the height of shutdowns designed to slow the spread of the coronavirus, just 6,000 people held those jobs in Allegheny, Armstrong, Beaver, Butler, Fayette, Washington and Westmoreland counties.
The stunning 87% decline made full-service restaurants by far the worst affected regional employment category tracked by the state Department of Labor and Industry between last April and this one.
But the virus is not an equal-opportunity employment destroyer. Some sectors remained remarkably resilient in that cruelest month.
There were 62,500 people working in finance and insurance in the metro area in April — 1,600 more than during the same month last year.
Scientific research and development gained 700 jobs from the year before. Colleges and universities shed less than 1% of their 43,000 jobs.
Labor researchers see in those disparities evidence of an unprecedented disruption, as well as signs that the region’s diversifying economy has helped it avoid much worse distress.
“Arts, entertainment, recreation, accommodations, food services — those kinds of sectors are just devastated,” said Lowell Taylor, an economics professor at Carnegie Mellon University.
In a normal recession, some of the weakest firms close, he explained. That reshuffling can provide benefits for the economy as a whole — if not for the workers and businesses directly affected — by redirecting jobs from industries that are already in long-term decline into industries that are flourishing.
“This feels very different though,” he said.
“Firms that are perfectly efficient — that should, from an economics perspective, persist in the long run — are going out of business because they run out of financing or they have short-term cash flow problems,” he said. “That is the sort of thing that really could create long-term damage.”
Economists and financial analysts are raising concerns that many millions of newly unemployed people across the country will not be able to go back to work in the same places or industries they left.
A May report published by the University of Chicago estimated that 42% of recent layoffs will result in permanent job loss.
Research by Bloomberg Economics in June said 30% of U.S. jobs lost from February to May are unlikely to return, forcing workers
to retrain or move to find employment.
The Bloomberg analysis found some sectors — like leisure, hospitality, retail, education and health — are especially vulnerable to that kind of shock. Financial services and information are much less at risk.
In southwestern Pennsylvania, “It’s pretty remarkable that financial services didn’t lose any jobs over the year” during the deepest stage of coronavirus-related economic shutdowns, said Christopher Briem, a regional economist at the University of Pittsburgh’s Center for Social and Urban Research.
Part of that resiliency is thanks to professional workers’ ability to carry on much of their work from home. If telework hadn’t been an option, “this would have been a much more serious event,” he said.
“We’ve diversified away from being a very blue-collar economy,” he said. “There’s no way a steel worker was ever going to be working at home.”
In a report on the pandemic’s initial labor force impacts based on surveys in
Allegheny County in late April and early May, the University Center for Social and Urban Research found demographic differences in which workers were displaced during the strictest stages of the shutdown.
Black workers were more affected by job loss than workers of other races, women more than men, older workers more than younger workers, less educated more than those with an advanced education.
“Most of it is not surprising. We know there are certain disparities in the region,” Mr. Briem said.
But he was struck by the age differences.
“If you understand the way past periods of significant job loss worked, younger workers were typically the most vulnerable to job loss — last in, first out.”
In this case, younger workers were able to adapt to working at home much more than workers age 65 and over, who more often lost jobs or kept working at their normal worksites, even though they were at risk of suffering the worst effects of COVID-19.
Mr. Taylor is watching some sectors for hints of what kind of rebound might come next.
Construction employment in the metro area dropped from nearly 62,000 workers in April 2019 to around 37,000 workers this April — “a huge decline.”
“If construction picks back up, that tells you that firms and enterprises are planning for the future,” he said. If it doesn’t happen, “that’s the kind of thing that suggests significant lingering effects.”
He is also watching for aftershocks.
Employers that weathered the initial wave of closures with relatively few jobs losses may face mounting struggles in coming months. He named hospitals, colleges, and state and local governments as facing impending challenges.
Even that outlook assumes the spread of the virus has peaked in the state, which is certainly not guaranteed.
“The course of the pandemic over the coming months is going to be absolutely critical to what happens in the labor market,” he said.