Service industry can be changed after coronavirus disappears

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For years, personal trainer Amanda Tikalsky has not had to worry much about her job. The record 11-year expansion of the US economy has provided security for service workers like her.

Then came the coronavirus, which closed the Milwaukee track and field club where she worked for 15 years. She was quick to organize online exercise sessions to get the money back. About 25% of her clients have made the leap with her.

“This is an adjustment for everyone,” she said. “We are used to being face to face. “

But even when the viral threat is gone, Tikalsky predicts that many clients will continue to exercise from home. The judgment is also likely to change his own buying habits. She has a new appreciation for the ease of shopping for groceries online.

The pandemic is almost certain to leave a mark on the way people work, shop and socialize, perhaps permanently changing the functioning of many service industries. Consumers will be more serious about the health implications of sneaking into crowded restaurants and movie theaters. More and more businesses will accept the efficiency of homeworkers, and the shift to online shopping will accelerate.

“We have never known a crisis where we could not socialize with people,” said John Gordon, founder of Pacific Management Consulting Group in San Diego, who advises restaurants.

Martia Weaver waits for customers at the window of her Freitas cuban burgers restaurant as the city government takes action to fight the coronavirus epidemic March 25, 2020 in Key West, Florida. Most tourists have left Key West because the city has closed hotels or short-term vacation rentals and asked restaurants to serve only take-out. Beaches and parks have been closed and starting Friday, non-residents cannot enter the Florida Keys without proof of employment or ownership as city officials attempt to contain COVID-19.

A success for the industry

Until March, service workers – from dishwashers to real estate agents – enjoyed a record streak in the job market. Service jobs in the United States had increased for a decade.

The sector seemed almost immune to the vagaries of the economy. Even low-wage overseas competition or automation do not appear to threaten service jobs that require direct contact with customers.

Then the virus arrived. It has disrupted the service economy, which accounts for 84% of employment in the US private sector. It cut 659,000 service jobs in March – 94% of the jobs that disappeared last month as the US economy plunged into recession.

He is sure to demand a lot more. In an interview with CNBC on Monday, former Fed chairman Janet Yellen predicted unemployment rates could reach levels of the Great Depression. But because the economy was in good shape before the outbreak, she said, returning to normal employment could happen much faster than during the depression or after the great recession of 2007-2009.

When the economy plunges, manufacturers, not service providers, are usually the first and the hardest hit.

Not this time. The virus has been a punch for businesses that rely on social gatherings – restaurants, cinemas, theaters, hotels, airlines, gyms, shopping malls. More than 250,000 stores are now temporarily closed, which represents nearly 60% of the retail space, according to Neil Saunders, managing director of GlobalData Retail, a research firm.

The situation is similar in many other countries. In Wuhan, China, where the viral outbreak began, consumers are still reluctant to shop as conditions slowly return to normal.

Josh Rivas is one of the millions of job losses in the United States, working on a metro in a Connecticut rest area, where he and his colleagues were laid off due to the virus amid the decrease in traffic in the square. . “We cannot afford to miss a day’s wages because we have families we have to take care of and bills we have to pay,” he said.

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