Why the pandemic left long-term scars on world job market

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Esther Montanez’s housecleaning job on the Hilton Again Bay in Boston was a lifeline for her, a 31-year-old single mom with a 5-year-old son.

The pay was regular and strong — sufficient to pay her payments and nonetheless have cash left over to sock away for a financial savings account for her baby. Montanez preferred her co-workers and felt satisfaction in her work.

However when the viral pandemic slammed violently into the U.S. financial system a 12 months in the past, igniting a devastating recession, it swept away her job, together with many tens of thousands and thousands of others. Since then, in desperation, Montanez has siphoned away cash from her son’s financial savings to assist meet bills. At Christmas, she turned to charities to supply presents for him. For now, she’s getting by on unemployment help and, for the primary time, has utilized for meals stamps.

“The truth is, I want my job back,’’ said Montanez, who has banded with her former colleagues and worked through their union to press the hotel to reinstate their jobs.

Getting it back could prove a struggle for her, along with millions of other unemployed people around the world. Even as viral vaccines increasingly promise a return to something close to normal life, the coronavirus seems sure to leave permanent scars on the job market. At least 30% of the U.S. jobs lost to the pandemic aren’t expected to come back — a sizable proportion of them at employers that require face-to-face contact with consumers: Hotels, restaurants, retailers, entertainment venues. United Here, Montanez’s union, says 75% of the 300,000 hospitality workers it represents remain out of work.

The threat to workers in those occupations, many of them low-wage earners, marks a sharp reversal from the 2008-2009 Great Recession, when middle- and higher-wage construction, factory, office and financial services workers bore the brunt of job losses.

No one knows exactly what the job market will look like when the virus finally ends its rampage.

Will consumers feel confident enough to return in significant numbers to restaurants, bars, movie theaters and shops, allowing those decimated businesses to employ as many people as they did before?

How much will white-collar professionals continue to work from home, leaving downtown business districts all but empty during the week?

Will business travel fully rebound now that companies have seen the ease with which co-workers can collaborate on video platforms at far less cost?

“Jobs are changing — industries are changing,’’ said Loretta Penn, chair of the Virginia Ready Initiative, which helps workers develop new skills and find new jobs. “We’re creating a new normal every day.’’

The habits that people have grown accustomed to in the pandemic — working, shopping, eating and enjoying entertainment from home — could prove permanent for many. Though these trends predated the virus, the pandemic accelerated them. Depending on how widely such habits stick, demand for waiters, cashiers, front-desk clerks and ticket takers may never regain its previous highs.

The consultancy McKinsey & Co. estimates that the United States will lose 4.3 million jobs in customer and food service in the next decade.

In a study, José María Barrero of Mexico’s ITAM Business School, Nick Bloom of Stanford University and Steven Davis of the University of Chicago concluded that 32% to 42% of COVID-induced layoffs will be permanent.

The U.S. Labor Department, too, has tried to estimate the pandemic’s likely impact on the job market. Before taking the pandemic into account, the department last year projected that U.S. jobs would grow 3.7% between 2019 and 2029.

Last month, it estimated that if the outbreak’s lasting economic effects were limited mainly to increased work from home, job growth over the 10 years would slow to 2.9%.

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But if the pandemic exerts a deeper, longer-lasting impact — with many consumers going less frequently to restaurants, movie theaters and shopping centers — job growth would slow to just 1.9%, the department predicted. In that worst-case scenario, the department estimated, employment would tumble 13% for waiters and waitresses, 14% for bartenders, 16% for fast food cooks and 22% for hotel desk clerks.

The coronavirus recession has been especially cruel, victimizing people at the bottom of the pay scale. Lael Brainard, one of the Federal Reserve’s governors, said last month that the poorest 25% of American workers were facing “Depression-era rates of unemployment of around 23%’’ in mid-January — nearly quadruple the national jobless rate.

The Fed also reported last month that employment in the lowest-paid jobs was running 20% below pre-pandemic levels. For the highest-paying jobs, by contrast, the shortfall was just 5%.

Services workers had long been thought to be safe from the threats that menaced factory employment: Foreign competition and automation. But more and more, as employers have sought to save money in a time of uncertainty and to promote social distancing in the workplace, machines are reaching beyond the factory floor and into retail, restaurants and hotels.

Tamura Jamison, for instance, came back to a changed job when she was recalled to work in June as a front desk agent at the Paris Las Vegas Hotel & Casino, owned by Caesars Entertainment. Her hours were cut from 40 to about 32 a week, resulting in a pay cut of about $700 a month.

Just 26 of 45 workers on her team were brought back. Existing self-service kiosks used to be optional for guests checking in. No longer. Now, agents must direct guests to the kiosks and intervene only if needed. That means fewer commissions for room upgrades; guests can request them on their own.

As a union shop steward, Jamison knows that her missing colleagues won’t likely be recalled.

“At this point,” she said, “they have to move on with their lives.”

Jamison wonders whether or not the entrance desk operation will ultimately be eradicated altogether, the roles misplaced to automation. Company, she notes, will quickly have keys on their smartphones, permitting them to go on to their rooms.

“This is the start of a new Vegas,” Jamison said. “The front desk doesn’t really have to be there. There are ways to eliminate our jobs.”

In a research out final month, Stefania Albanesi of the College of Pittsburgh and Jiyeon Kim of the Korea Improvement Institute warned that in a world nonetheless afraid of the virus or of different well being threats, many firms might substitute workers with machines quite than redesign workspaces to facilitate social distancing and scale back the specter of an infection.

The companies occupations which have absorbed the largest job losses, they are saying, “have high susceptibility to automation.’’ That “raises the prospect that as the economy recovers, at least some of the jobs lost may not be reinstated.’’

Few places have been hurt more ruinously by the pandemic than Las Vegas, whose economy is powered by out-of-town visitors and live entertainment. Until 12 months ago, Sharon Beza was among 283,000 workers in the city’s tourism and hospitality field. She had worked as a cocktail waitress at Eastside Cannery hotel-casino from the time it opened in 2008 to the day she was furloughed a year ago. Over the summer, her job was eliminated.

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Now a part-time cashier at an Albertsons grocery store, Beza is still seeking full-time work in the restaurant industry, which employed her for 37 years. She’s holding out hope that Las Vegas will rebound and tourists will return to restaurants, hotels and casinos. But it may be impossible, she knows, for laid-off workers like her to land jobs that offer the kinds of solid wages, tips and benefits they used to enjoy.

In Europe, government jobs programs have prevented a devastating spike in unemployment. Unemployment in January was 8.1%, up only modestly from 7.4% a year earlier. Yet an economic reckoning has begun, with companies in the worst-hit sectors envisioning years of reduced demand.

Consider commercial airlines. Lufthansa’s workforce shrank from 138,000 to 110,000 in 2020. British Airways plans to cut 12,000 jobs from its 42,000-strong workforce. UK-based regional airline Flybe took 2,000 jobs with it when it collapsed a year ago.

Germany’s hotel and restaurant association says that despite government support to help maintain payrolls, employment sank from 2.45 million pre-pandemic to 2.09 million. Holger Schaefer, a labor economist at the German Economic Institute in Cologne, suggested that behavioral changes — more digital meetings, for example, and less business travel — would result in permanent job losses in some companies.

By contrast, some other sectors of the economy should benefit from pent-up demand once the virus is defeated. Schaefer is optimistic about restaurants, for one.

“There is a fundamental demand for such services,” he said. “I can’t imagine that when everyone is vaccinated and it’s safe, that there will still be problems in that area.”

Around the globe within the Chinese language metropolis of Xuzhou, northwest of Shanghai, Guan Li, a comfort retailer proprietor, stated he employed 4 out-of-work kinfolk however needed to lay them off after gross sales fell by half. Now, he and his spouse run the store themselves.

“People just don’t want to buy,” he stated. Guan, who’s near 60, and his spouse plan to retire as a result of the store’s revenue might not cowl their prices. House owners of two comparable retailers close by additionally plan to shut, he stated.

In Egypt, Mohammed Gamal used to earn a good dwelling working six days per week at a café in Giza, twin metropolis of Cairo. However pandemic restrictions and dwindling enterprise shrank his workweek and slashed his revenue by greater than half. It didn’t assist when the federal government banned “sheesha,’’ the hookah water pipe that’s popular across the Middle East and is a major moneymaker for cafes.

In mid-2020, he sent his wife and two children back to his parents’ house in Beni Mazar, south of Cairo. Now, he shares a room with a friend to save on rent.

“I just work three days a week, and this is not enough even for a single person,” stated Gamal, 31.

In Mexico Metropolis, Gerardo González, carrying a go well with, a black masks and a plastic face defend, waited just lately on the sidewalk exterior the supply service Didi. He had hoped to search out work a month after he misplaced his job at a bakery the place he did cleansing and displayed merchandise.

He’s utilized for jobs at 5 firms.

“I can’t get anything,” stated González, 51, who helps his spouse and two younger kids. To fulfill his household’s bills, he is burned via his financial savings.

“We hope that with the vaccine, things will start going back to normal,” he said.

Melinda Harmon lost a job she loved as a bartender at Milwaukee’s Fiserv Forum last year. First, she found work as a health care aide for $9.25 an hour. Even after receiving a raise to $10, she struggled to support her two sons. Frustrated, she resigned and took on a new job as a security guard for $12 an hour. She’s been switching off lights to save money for electricity and has had to delay haircuts for her two beloved Pomeranians.

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Yet she remains optimistic that the Fiserv Forum will reopen and that she will one day be mixing drinks for Bucks fans again.

“I do believe things will go back,” said Harmon, 39.

In New York, Bill Zanker is also envisioning a comeback after being forced to close his luxury gym, Grit Bxng. He’s raising money to launch an at-home fitness business in the fall, which will mean eventually hiring to support a online business, including customer service and supply specialists.

Still, Zanker is hopeful that his Manhattan gym, known for its cocktail bar and backed by billionaire Tony Robbins and others, will eventually come roaring back. Before the pandemic forced its closure, Zanker said, classes would be booked for the entire week within two hours each Monday morning. With the bar typically packed, he had been on the verge of opening a second location.

“There is so much pent-up demand,” Zanker said. “People after class are going to want to hang out and socialize. It’s like after Prohibition: Party like there’s no tomorrow.”

Nevertheless issues shake out, the pandemic disruption to the job market will seemingly require thousands and thousands of staff to search out new careers. Reviewing the job outlook in eight main economies, McKinsey estimated that 100 million staff — 1 in 16 — might want to change occupations by 2030. In america, McKinsey concluded, staff who will want retraining are more than likely to have a misplaced low-income job and to be Black, Hispanic or feminine.

“You can take people in these unskilled positions and teach them,’’ said Susan Lund, an author of the consultancy’s report on the jobs of the future. But in the United States, she said, “the problem is, we have not scaled it up. We do not a have a national program to do it.’’

The U.S. spends a fraction of what other rich countries do on programs that are designed to help workers make career transitions. And a bewildering web of employment and training programs often leaves workers confused. The programs tend to focus on helping laid-off factory workers — not the unemployed chefs and sales clerks who are likely to be most in need in the pandemic’s aftermath.

“We make people jump through insane hoops just to get advice on getting a new job,” stated Annelies Goger, who research coaching packages as a fellow on the Brookings Establishment. “We make it extraordinarily difficult.”

In a paper last year, David Autor and Elisabeth Reynolds of the Massachusetts Institute of Technology warned that dwindling demand for low-paid workers without college degrees won’t coincide with job opportunities for “these same workers in middle-paid jobs…

“Those displaced may suffer significant hardship as they seek new work, potentially in occupations where they have no experience or training,” they wrote.


Wiseman reported from Washington, Olson from New York. AP writers David McHugh in Frankfurt, Germany; Frances D’Emilio and Maria Grazia Murru in Rome; Joe McDonald and Yu Bing in Beijing; Zen Soo in Hong Kong; Chen Si in Shanghai; Sam Magdy in Cairo; Sam Metz in Carson Metropolis, Nevada; and Fabiola Sánchez in Mexico Metropolis additionally contributed to this report.


Extra AP protection of the pandemic’s first 12 months: Pandemic: One Yr