2020-03-30_Bloomberg_Businessweek

E C O N O M I C S

30

Edited by

Cristina Lindblad

JuanSandovalusedtowork 70 hoursa week,

splittinghistimebetweena fried-chickenfast-food

chaininChicago’sWestLoopanda well-known

Italianeaterya fewmilesaway.

ThatwasbeforeIllinoisannouncedinmid-March

thatdiningestablishmentsacrossthestatewould

havetoclosefordine-incustomers.Sincethen,the

49-year-oldfatheroftwohasbeenabletopatch

togethershiftsassemblingtakeoutmealsatthefried-

chickenplace,butthatonlyaddedupto 20 hours

intheweekafterthebantookeffect.Meanwhile,

Sandovalhasn’theardbackfromhismanagersat

theItalianrestaurant,wherehemade$14anhour

preppingsalads.“I’mworriedaboutif I’mgoingto

getmoneyforfoodandtopaymyrent,”hesays.

TheU.S.economyhasneverbeenmoredepen-

dentonjobsintheleisureandhospitalitysector—

restaurants, hotels, and entertainment venues.

ButwiththecoronavirusoutbreakintheU.S.,that

sectorhasbeenseverelythreatened.Morethan

1 in 10 workers, about 16.9 million in total, were

employed in these industries as of February, a

record. Also at an all-time high: the share of over-

all consumer spending being directed toward those

businesses—about 8.6%, or $1.3 trillion a year.

Much of that economic activity is disappear-

ing overnight—shut down by decree, as local gov-

ernments impose social-distancing measures

designed to halt the spread of the lethal virus.

Transportation services—which include every-

thing from airlines to Uber—account for an addi-

tional $486 billion in annual consumer spending,

and they’re taking a big hit, too.

It all adds up to massive layoffs at an unprece-

dented pace. The unemployment rate in February

was 3.5%, a 50-year low, but James Bullard, president

of the Federal Reserve Bank of St. Louis, has warned

that it could reach 30% within months—a level that

would exceed the peak during the Great Depression.

A March 17 report by the staffing firm Challenger,

Gray & Christmas projects the restaurant industry

alone could shed as many as 7.4 million jobs.

Like a tsunami, the wave of layoffs came

suddenly and with practically no warning. FROM LEFT: PHOTOGRAPH BY TRISTAN WHEELOCK FOR BLOOMBERG BUSINESSWEEK; PHOTOGRAPH BY ROGER KISBY FOR BLOOMBERG BUSINESSWEEK. DATA: BUREAU OF LABOR STATISTICS

● Measures to control the

epidemic are crushing a

sector employing more than

1 in 10 U.S. workers

Collateral Damage