BloombergBusinessweek March 30, 2020
What comes next isn’t going to be anything like
past recessions seen in the U.S., says Gabriel Mathy,
an economics professor at American University in
Washington. Typically downturns start in the man-
ufacturing sector, then spread to service industries—
which tend to weather them relatively well. That’s
because while consumers may delay purchases of
big-ticket items such as cars or washing machines,
they’ll still try to squeeze in the occasional restau-
rant meal or trip to the movies.
But with many of those businesses in dan-
ger of going under—and the people they employ
being thrown out of work—the rapid post-virus
rebound that forecasters hope for may prove to
be a pipe dream. People won’t make up for all
the times they didn’t go out, especially if they’ve
beenwithoutpaychecksforweeksormonths.
“Economistsdon’treallyhavea goodroadmap
forthis,”saysMathy.
The risks could compound quickly, with rent
payments due for millions at the start of the month.
Robert West, 44, like so many others, is already
running the numbers in his head. He lost his job
as a cook in a Philadelphia restaurant just a few
days after the city enacted a ban on dine-in service
onMarch16.Hehassomesavings,buthe’swon-
deringhowlongthey’lllast.Manyofhisyounger
co-workers don’t have even that cushion, living
paycheck to paycheck and continually scrambling
for extra hours or shifts, he says. “A lot of people
who rent are going to have trouble onApril1.”
Workers in the leisure and hospitalityindus-
try are the lowest paid of any of thesectors
31
Unemployment offices in several states reported
jammed phone lines or website glitches as claims
piled up. Based on preliminary reports from sev-
eralstates,analystsatS&PGlobalRatingsproject
thattheweeklyinitialjoblessclaimsreportdue
outonMarch 26 couldshowasmanyas3 million
Americansfilingforunemployment insurance,
which would bearecord.
1m NewYorkCity
138k
LosAngeles
Miami
Atlanta
Philadelphia
SanFrancisco
Detroit
Seattle
Orlando
SanDiego
Minneapolis
Riverside,Calif.
Denver
Tampa
St.Louis
Baltimore
Charlotte
Portland, Ore.
Washington,D.C.
Houston
Chicago
Dallas
Phoenix
Las Vegas
Boston
▼ Number of workers
in the leisure and
hospitality sector by
metropolitan area
Asshareofall jobs:
●10-11%
●12-13%
● Over 13%
2/1939 2/2020
6.2%
11.1%
Share of U.S. employment in the leisure
and hospitality sector
Collateral Damage
● Orlando ● Las Vegas
