Q4 employment trends: Retail hangs on through the holiday season as restaurant and hospitality drop
2020 was a roller coaster of a year for small businesses, and that’s putting it mildly. With constantly changing local restrictions, the back and forth surges of COVID-19, and the public’s comfort level of going out during a pandemic, business owners across the country have had a lot to handle.
Across the country, cases of the virus are skyrocketing—and the nation is holding its collective breath until a vaccine is widely available. During what should’ve been the busiest, most profitable time of the year, the retail, restaurant, and hospitality industries have been fighting to stay alive. Forgivable PPP loans helped these businesses keep workers on the payroll earlier in the pandemic, but without more government financial aid in 2020, they’ve struggled this season, in what’s typically the highlight of the year. In fact, 62% of small businesses say that they believe the worst of the pandemic is still ahead of us.
Everyone has seen the unemployment numbers go down, and heard the experts touting the U.S. economic recovery as slow and steady. But that’s not necessarily the case for these three important industries. When I Work has a unique lens into how many people are actually working, and how much work is really happening. And the startling truth is that unemployment and underemployment in shift-based workplaces is underestimated and underreported. Here’s what our data is showing for this traditionally busy winter season.
Unemployment and underemployment hold steady during the holiday season
Overall, combined unemployment in these three industries is up 2.5%, from 25.5% in October, to 28% in December. Combined underemployment is up 6%, from 22% to 28%.
Retail is staying afloat with holiday shopping
Retail is doing the best, as the holiday season helped drive sales. For the past few years, the retail industry added around 7% more jobs during the holiday season. In 2020, numbers were flat, with November seeing a gain of just 0-1%. Underemployment has recovered more than unemployment, suggesting that workers are getting more hours due to increased demand.
Food service struggles due to colder weather and more restrictions
The restaurant industry declined in November, falling 0-3%, making their numbers 1.5 to 3 times worse than retail. There are a few reasons for this. First, colder temperatures have taken away consumers’ safest option, patio dining. Experts estimate that almost three million jobs recovered since April could be lost due to the colder winter weather. Additional restrictions across the country in the face of rising COVID-19 cases are also causing a problem for restaurants, where hours and services are limited. For example, Minnesota saw a 19% drop in hours worked in preparation for Governor Tim Walz’s increased restrictions on November 11th, 2020.
Hospitality is the hardest hit of all
Hospitality numbers for November are 2.5 to 4.5 times worse than retail. As of December 15th, hospitality jobs were down 18% week over week, down 35% month over month and down 22% since early March. The hospitality industry accounted for 11% of all U.S. jobs before the pandemic, but they’ve suffered 35% of the losses, with unemployment that’s double the national average at 15%.
Holiday shopping kept retail numbers afloat, but the restaurant and hospitality industries are still battling continued restrictions and colder weather. Overall underemployment for all three industries is getting worse, and unfortunately, we believe that these trends will continue until warmer weather arrives, restrictions are lifted, and/or the public gets more comfortable going out. We’re hopeful that the vaccine will help the economy make bigger strides toward recovery in 2021.