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Which Jobs Have Been Hit Hardest by COVID-19?

KEY TAKEAWAYS

  • Between mid-March and the last week of April 2020, more than 33 million people applied for unemployment insurance in the U.S.
  • During the same period, the national unemployment rate increased from 3.5% to 14.7%—the largest spike in the post-World War II era.
  • The hardest-hit jobs were in the leisure and hospitality sector, as well as service and manufacturing, while employment in financial activities came through relatively unscathed.
couple with masks checking into hotel room

By

Maximiliano A. Dvorkin
Monday, August 17, 2020

The coronavirus pandemic has disrupted our way of life and shaken labor markets in the U.S. and the rest of the world. Between mid-March and the last week of April, the most critical period for job separations, more than 33 million U.S. workers applied for unemployment insurance. As striking as this figure is, initial claims have continued to show exceptionally large numbers.

In this article, I examine which industries and occupations were most affected by the pandemic between February and April 2020 using Bureau of Labor Statistics (BLS) information on employment and unemployment by industry and occupation.The U.S. Bureau of Labor Statistics reports information on the total number of jobs and workers and their characteristics each month. Information on jobs comes from the Current Employment Statistics survey (CES), which queries businesses and government agencies. Information on workers and their employment status comes from the Current Population Survey (CPS). The main differences between the CES and the CPS are the agriculture sector, private households and self-employed individuals, which are included in the CPS but not in the CES, and the treatment of multiple jobholders, who are counted only once in the CPS, while each job is counted separately in the CES. See Table 1.

Data from the BLS, which surveys the employment status of individuals, show that between mid-March and mid-April, the number of employed people decreased by roughly 22 million. This figure aligns with the number of unemployment insurance claims filed during the same period.For the CPS, the U.S. Bureau of Labor Statistics takes the week containing the 12th day of the month as the reference week for employment status. For March 2020, the reference week is March 8 to March 14, and for April 2020, the reference week is April 12 to April 18.

Table 1: Employment and Unemployment by Industry (in Thousands), February to April 2020Data payrolls are from the CES, while data on employment and unemployment are from the CPS.
Payrolls Unemployed
Industries Feb. '20 Apr. '20 % Chg Feb. '20 Apr. '20 % Chg
Mining and Logging 714 657 -8.0 46 77 67.4
Construction 7,639 6,631 -13.2 531 1,531 188.3
Durable Goods Manufacturing 8,058 7,124 -11.6 359 1,416 294.4
Nondurable Goods Manufacturing 4,794 4,364 -9.0 254 576 126.8
Trade, Transportation and Utilities 27,830 24,719 -11.2 1,077 4,212 291.1
Information 2,894 2,636 -8.9 68 279 310.3
Financial Activities 8,845 8,580 -3.0 167 545 226.3
Professional and Business Services 21,529 19,332 -10.2 795 1,697 113.5
Education and Health Services 24,586 21,941 -10.8 608 2,552 319.7
Leisure and Hospitality 16,867 8,715 -48.3 799 4,860 508.3
Other Services 5,941 4,636 -22.0 187 1,421 659.9
Government 22,745 21,737 -4.4 347 2,017 481.3
TOTAL 152,442 131,072 -14 6,218 22,504 261.9
SOURCES: U.S. Bureau of Labor Statistics and author’s calculations.
NOTE: Numbers for February and April are in thousands. Totals for unemployment differ from the sum of industries and occupations due to people without prior information on industry or occupation. Unemployment by industry excludes the self-employed and the agriculture sector.

This disruption in U.S. labor markets is a result of increased social distancing and many other restrictions on people’s daily activities. These safety measures have directly affected many businesses, particularly those that involve direct contact with customers or clients, such as those in the leisure and hospitality sector, but also indirectly through lower demand. Between February and April, the unemployment rate increased from 3.5% to 14.7%, the highest value in the post-World War II era. Even this magnitude does not fully capture all the slack in the economy, with a massive increase in the number of people employed part time for economic reasons and those not in the labor force but marginally attached to it.

Job Numbers in Perspective

On average, the total number of jobs fell by 14% between February and April. While job losses were widespread across all industries, the change in the leisure and hospitality sector was dramatic, with almost half of those jobs disappearing. This sector includes firms providing entertainment and recreation services as well as accommodation and food services. Social distancing and stay-at-home orders severely limit the activities of these firms.

In February, this sector comprised 11% of all jobs in the U.S. By April, it accounted for less than 7% of all U.S. jobs. The other services sector, which includes activities such as repair and maintenance, and personal services (such as barber and beauty shops), also had an important contraction, and one in five of these jobs was lost in just two months.

At the other extreme, employment in the financial activities sector—which comprises finance, insurance and real estate—and in the government sector declined only slightly compared with the decline in the rest of the economy. It is possible these sectors were well-prepared to provide services to consumers remotely and that these kinds of jobs have the most potential to be done from home.

In this way, it is not surprising that leisure and hospitality, and other services, show the largest increase in unemployment.In the CPS, unemployment by sector (or occupation) is measured using the sector (or occupation) of last employment of an unemployed individual. The number of unemployed individuals whose last occupation was leisure and hospitality, or other services, increased by over 500% and 660%, respectively.

Social Distancing and the Service Sector

Table 2 shows information on employment and unemployment changes by occupation. By and large, service occupations—which entail mostly non-routine, manual tasks, such as food preparation or assisting and caring for others—experienced the largest decline in employment between February and April, at more than 30%. The leisure and hospitality sector employs a large number of workers in these occupations; thus the decline in this sector is expected.

Table 2: Employment and Unemployment by Occupation (in Thousands), February to April 2020
Employed Unemployed
Occupation Feb. '20 Apr. '20 %Chg Feb. '20 Apr. '20 %Chg
Management, Business and Financial Operations Occupations 27,866 26,437 -5.1 507 1,742 243.6
Professional and Related Occupations 38,225 34,715 -9.2 700 3,337 376.7
Service Occupations 26,204 18,042 -31.1 1,272 6,723 428.5
Sales and Related Occupations 15,064 12,218 -18.9 657 2,519 283.4
Office and Administrative Support Occupations 16,296 14,328 -12.1 554 2,080 275.5
Farming, Fishing and Forestry 1,139 1,079 -5.3 183 153 -16.4
Construction and Extraction Occupations 8,149 6,549 -19.6 604 1,529 153.1
Installation, Maintenance and Repair Occupations 4,918 4,199 -14.6 122 619 407.4
Production Occupations 8,361 6,380 -23.7 448 1,457 225.2
Transportation and Material Moving Occupations 11,794 9,378 -20.5 682 2,045 199.9
TOTAL 158,017 133,326 -15.6 6,218 22,504 261.9
SOURCES: U.S. Bureau of Labor Statistics and author’s calculations.
NOTE: Numbers for February and April are in thousands. Totals for unemployment differ from the sum of industries and occupations due to people without prior information on industry or occupation. Unemployment by industry excludes the self-employed and the agriculture sector.

The second-largest decline was in production occupations, at 24%. These are mostly machine operators in manufacturing, but also laundry and dry-cleaning workers largely employed in the accommodation industry. The decline in employment in the industries that produce durable manufactured goods contributed greatly to the decline as well.

On the other extreme, people in management, business and financial operations occupations experienced the smallest decline, with roughly a 5% employment drop.

In terms of unemployment, occupations in services, as well as installation, maintenance and repair, experienced the biggest losses, with an increase of over 400% each. In addition, professional occupations (which include legal, education, entertainment and sports, and health care occupations) also experienced a large increase in unemployment between February and April.

As social distancing measures continue to affect the way individuals interact in the marketplace and the workplace, the deterioration in the labor market will continue, but a rapid economic recovery is possible if an effective solution to COVID-19 develops quickly. In April the share of all temporarily laid-off workers was close to 80%, while in the first two months of the year it was around 13%. However, if workers are not recalled to their old jobs, the changes in the behavior of consumers, workers and employers could be more permanent, affecting the labor demands of different sectors and requiring a protracted reallocation of resources.

Endnotes

  1. The U.S. Bureau of Labor Statistics reports information on the total number of jobs and workers and their characteristics each month. Information on jobs comes from the Current Employment Statistics survey (CES), which queries businesses and government agencies. Information on workers and their employment status comes from the Current Population Survey (CPS). The main differences between the CES and the CPS are the agriculture sector, private households and self-employed individuals, which are included in the CPS but not in the CES, and the treatment of multiple jobholders, who are counted only once in the CPS, while each job is counted separately in the CES.
  2. For the CPS, the U.S. Bureau of Labor Statistics takes the week containing the 12th day of the month as the reference week for employment status. For March 2020, the reference week is March 8 to March 14, and for April 2020, the reference week is April 12 to April 18.
  3. Data payrolls are from the CES, while data on employment and unemployment are from the CPS.
  4. In the CPS, unemployment by sector (or occupation) is measured using the sector (or occupation) of last employment of an unemployed individual.
ABOUT THE AUTHOR
Maximiliano A. Dvorkin 

Maximiliano Dvorkin is a senior economist at the Federal Reserve Bank of St. Louis. His research focuses on labor reallocation and the effect of different economic forces on workers’ employment and occupational decisions. He joined the St. Louis Fed in 2014. Read more about the author and his work.