Retail, restaurant and hotel workers are flooding the New Hampshire unemployment system to apply for benefits during the statewide emergency shutdown to stem the spread of coronavirus.
It’s clear that these are among the hardest hit businesses in New Hampshire and across the country. And in New Hampshire, they represent the second- and third-largest job sectors of the economy, according to the New Hampshire Fiscal Policy Institute, a nonprofit organization that promotes public policies to enhance economic opportunity, particularly for low- and moderate-income residents.
In the institute’s report last month, using New Hampshire Employment Security estimates for January 2020, the retail category accounted for 93,500 jobs, or about 13 percent of the state’s workforce. Another 61,400 people work in accommodation and food services, or about 9 percent of the state’s total nonfarm employment of 690,300. The health care and social assistance sector has the largest share of the state’s employment pie, with 14 percent.
Last week, the number of unemployment claims in New Hampshire skyrocketed to 29,379 for the week ending March 21 – a nearly 45-fold increase from 642 the prior week, as the impact of social distancing and business closings took effect and led to mass layoffs.
The same industries – the retail sector and accommodations and food service – combined make up 10 percent of the New Hampshire economy in terms of gross domestic product, or the value of goods and services purchased, according to U.S. Bureau of Economic Analysis figures cited in a report by the Casey School of Public Policy at the University of New Hampshire. Retail accounts for 7 percent of the state’s GDP, while accommodations and food contribute 3 percent.
The saving grace, if there is one for these mostly small businesses, is that the coronavirus crisis has occurred during one of the slowest times of year for traffic and tourism. “For New Hampshire, it’s coming into a slow season anyway for those areas,” said Annette Nielsen, economist for the Economic and Labor Market Information Bureau of New Hampshire Employment Security.
March and April, fondly known in New England as “mud season,” are traditionally quiet for retailers, restaurateurs and hotels. Clothing shops put their winter inventory on sale, and the damp and chilly weather dissuades many shoppers from purchasing newly arrived lightweight items for spring. Some restaurants scale back staffing while they await the flow of spring and summer visitors emerging from winter hibernation.
If Gov. Chris Sununu had to order all nonessential businesses to close – as he did in late March – in the middle of summer or around holiday season, these operators would have lost their key revenue-earning, peak-staffing months of the year.
For jobs supporting schools and the education system, including cleaning services and cafeteria workers, the timing is less fortunate. Those employees would have had a few more months of work before they saw their slow period in the summer months, so they’ve lost those wages earlier than normal. “In June or July is when we have normal claiming for those positions,” Nielsen said.
At the same time, some industries are seeing an unusual surge in demand at this time. Grocery stores cannot keep many products on the shelves – from eggs to antibacterial wipes. The warehouses and delivery services that distribute those desired consumer goods are working in overdrive, said Reagan Baughman, associate professor of economics at the Paul College of Business & Economics at the University of New Hampshire.
Even in a pandemic, she pointed out, people have to eat. “So food does well.”
The wholesale, transportation and warehousing sector of the economy that supports merchants, restaurateurs and hotels accounts for 8 percent of New Hampshire’s GDP, according to the Casey School’s report.
Some of those businesses have either added staff – supermarkets, for example, which are putting extra effort into cleaning their stores – or given existing staff more hours. The hiring process, though, is a challenge right now, Nielsen said.
Some employers require training and licensing for new workers but don’t have the time or proper social distancing set up to do that. Some of those are bringing back people who have worked for them in the past, Nielsen said.
Some restaurants and retailers will ultimately close for good, but those that can weather the coronavirus storm could bounce back quickly after the crisis subsides, especially if customers rush back to dine and shop after months of isolation, Baughman said. “That is something that economists are thinking about, is pent-up demand.”
It’ll take hotels, airlines and cruise companies longer to recover, she predicted, with people still wary of venturing away from home and needing time to renew their plans
“The big loser has to be hospitality,” she said. “That’s going to be a long slog. People are going to be nervous, because of the way this has spread, they’re going to be nervous about going other places.”
Of course, economists can only guess such outcomes in this unprecedented situation, Nielsen said. “In an economic sense, there really isn’t a comparison.”
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