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.
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.
Factories are often the first to cut jobs during a recession and do not always bring them back. American manufacturers still employ 918,000 fewer workers than before the Great Recession. Over the same period, employment in services increased by almost 14 million.
Economists are divided on whether service workers will face the type of economic disruption that factory workers have endured.
It depends a lot on the rescue efforts put in place by the United States government and the Federal Reserve. Congress and the White House are throwing at least $ 2.2 trillion into US businesses and households in a desperate attempt to keep them from sinking before the health crisis ends.
“As long as we do the right policy, we should get a fairly strong recovery,” said Heidi Shierholz, senior economist at the Liberal Institute for Economic Policy and former chief economist in the Labor Department. “When the lockout is over, I think we will have a pretty decent bounce. “
Shierholz does not expect a “transformative” change in jobs in the service sector.
Still, some of the effects of the epidemic are expected to persist, analysts said.
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Cooperating at home, Americans have discovered the convenience of online shopping again – something that is likely to accelerate the decline of traditional retail stores, said Diane Swonk, chief economist at accounting and consulting firm Grant Thornton.
Restaurants have closed their dining rooms and reduced take-out, delivery and curbside pickup service. Swonk expects the takeout trend to continue after the health crisis.
Food consultant Gordon predicts that local governments will reduce restaurant seating to prevent diners from overlapping. “Some of the places we went were just underarms. Can you see us do this now? “, Did he declare.
Millions of Americans have spent weeks working from home, and the experience has been instructive to many and to their bosses. After hours meetings and even virtual cocktails can be hosted on Zoom, WhatsApp or other programs.
“We just discover that we can organize amazing seminars and conferences online much more easily. We don’t have to travel anywhere, “said Arindrajit Dube, economist at the University of Massachusetts at Amherst. This is troubling for airlines and hotels that depend on business travel, sometimes to subsidize discounts for leisure travelers.
The increased attractiveness of home offices could also have implications for the real estate markets, providing more workers with expanded housing options as they will not need to commute to work.
But there can be limits to the enthusiasm of Americans for isolating themselves at home.
Becky Ahlgren Bedics, 49, of Fishers, Indiana, has been training via Zoom since the temporary closure of her fitness club in mid-March. But she plans to go to the club when it reopens. She misses the camaraderie. “There is such a connection with people,” she added.
D’nnocenzio reported from New York. Associated Press writers Christopher Rugaber in Washington and Josh Hoffner in Phoenix contributed to this story.