Santa Cruz Sentinel

1 year later: How COVID reshaped economy

- By Christophe­r Rugaber

At first, it was expected to be brief. At least that was the hope.

Instead, a once-in-a-century pandemic has ground on for a year, throwing millions out of work and upending wide swathes of the American economy. Delivery services thrived while restaurant­s suffered. Home offices replaced downtown offices. Travel and entertainm­ent spending dried up.

The job losses were swift and harsh. But they hardly fell equally across the economy. Black and Hispanic workers fared worse than others. And many women, mostly mothers, felt compelled to quit the workforce to care for children being schooled online from home. Despite the job cuts, Americans as a whole socked away a record level of savings, buoyed by government aid to the unemployed and income that higher-paid workers, hunkered down at home, managed to squirrel away.

Here’s where things stand at the one-year mark:

Job market reshaped

After a flood of layoffs last spring when the economy shut down, more than half the job losses have been regained. Yet hiring since the summer has slowed. The economy still has 9.5 million fewer jobs than before the pandemic — more than were lost in the entire 2008-2009 Great Recession.

Nearly every industry has been hurt but some far more than others. Restaurant­s, airlines and hotels have been devastated. The music industry, too, has taken a beating, with concert halls closed from New York to Nashville. The film industry has shed a huge proportion of jobs. Salons and dry cleaners have had to lay off many.

As more Americans have ordered dinners, groceries and household goods online, delivery drivers have emerged as the biggest source of job growth in the pandemic. Online retail has also created more work, mostly by boosting warehouse jobs.

For small businesses, a fight to survive

The “For Rent” signs on storefront­s and offices around the world provided a sad illustrati­on of COVID’s ruinous effect on small businesses. With government restrictio­ns and fear of infection keeping consumers out of stores and restaurant­s, businesses that operate on narrow revenue streams struggled over the past year. Or they vanished altogether, putting millions out of work.

It’s not known how many U.S. businesses have permanentl­y closed, but estimates from economists and the online review site Yelp suggest hundreds of thousands. Many more may still fail. Womply, a provider of financial and other services to businesses, estimates that one-third to one-half of all bars remain closed in many states, along with at least a quarter of restaurant­s and a third of health and beauty businesses.

Travel industries hammered

Most travel-related industries suffered a horrendous 2020. Planes and airports were left all but empty. On April 14, the Transporta­tion Security Administra­tion screened just 87,000 passengers at U.S. airports — down a stunning 96% from the same day in 2019. Even early this month, screened passengers were still down 43% from a year earlier.

It’s not clear when — or whether — travel will fully recover. Southwest Airlines CEO Gary Kelly said in December that business travel, a major source of airline revenue, was still down 90%. Far fewer people need hotel rooms, too.

Markets defy pandemic woes

Wall Street soared through much of the pandemic after righting itself from its initial terrifying plunge. Now, nearly a year after its rocket ride began in late March 2020, many fear that stock market gains might have gone too far, too fast.

Give much of the credit — or blame — for the market’s rally to the Federal Reserve, which slashed interest rates to record lows to help support the economy and financial markets. Ultra-low bond yields lifted hopes for corporate profits and fueled interest in stocks, especially the shares of the largest tech companies.

Some have dubbed the stampede into stocks the “There Is No Alternativ­e,” or TINA, trade, whereby investors felt that with bond yields so low, they had no choice but to load up on stocks. Surging enthusiasm for stocks among a new generation of investors, some of whom were stuck at home with time to fill and free trading apps on their phones, played a role, too.

Entertainm­ent shrivels

Movie theaters, concert halls, and sports stadiums stood largely empty last spring and summer in an initial attempt to help quell the pandemic. The absence of paying attendees cost the jobs of ticket-takers, concession-stand workers and lighting and sound technician­s.

Performers were hurt in other ways, too: For musicians who made money performing at weddings or other private events, those side gigs also dried up.

Online food delivery, retail save consumers

The pandemic emptied malls and restaurant­s and accelerate­d a trend toward online ordering and delivery. It’s far from clear that shoppers and diners will ever fully return to their old habits.

U.S. e-commerce sales have grown 22.5% faster than overall retail sales since the pandemic, according to Retail Metrics Inc. That’s up from 6% in the decade before the coronaviru­s.

Online services like curbside pickup, already embraced by discounter­s like Target and Walmart, were adopted by more stores, including Macy’s and Kohl’s. At the same time, U.S. demand for restaurant meal delivery jumped 137% last year, according to NPD Group. JustEatTak­eaway. com, a leading platform in Europe, said its delivery orders more than doubled last year.

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 ?? CHARLES KRUPA — THE ASSOCIATED PRESS ?? A “Space Available” real estate sign is posted on the facade of a closed supermarke­t in Manchester, N.H., on Tuesday.
CHARLES KRUPA — THE ASSOCIATED PRESS A “Space Available” real estate sign is posted on the facade of a closed supermarke­t in Manchester, N.H., on Tuesday.

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