Pittsburgh Post-Gazette

The COVID-19 virus has not been an equal-opportunit­y employment destroyer

- By Laura Legere

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.

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