Cristina Lopez Garcia was excited to buy a house last February.

It was an eight-minute drive from her job in the kitchen of a Las Vegas casino and she was confident that she and her husband could afford their new bills.

But about a month after they moved in, that financial stability disappeared.

The casino shut down because of the coronavirus, leaving Garcia out of work at a time when the couple was already low on savings. Her husband, who worked in the kitchens of other casinos, also lost one of his jobs, and his hours were cut in the other.

Almost a year later, their situation has barely improved.

After years of working in the food industry, the two have been unable to find new jobs during the crisis, which stifled travel and shuttered hotels and restaurants across the globe.

The sluggish recovery in hospitality has led to continued struggles for women, Hispanics and low-wage workers

“This is not our fault, it took us all by surprise,” Garcia, 36, said in Spanish. She has applied for about 15 jobs since May. “Our only hope is for our jobs to come back the way we had them.” Workers in the leisure and hospitality industry have fared worse than most during the pandemic and, barring a highly successful vaccine rollout that finally brings Covid-19 to heel, they face bleak prospects for a return to work.

Job losses seen in December, the first since the early months of the pandemic, fell disproportionately on people working in hotels, bars, restaurants and casinos and other businesses forced to retrench when the virus spread.

Leisure and hospitality firms shed another 498,000 jobs last month as virus infections rose, leading to more restrictions on businesses and causing more people to stay home. Employment in the industry in December was down 23 per cent from pre-pandemic levels in February, more than any other industry.

Policymakers at the Federal Reserve say the uneven recovery could weigh on the labour market, and the broader economy, for years.

“This has hit sector by sector,” said Richmond Fed President Thomas Barkin, who said he is hopeful the incoming Biden Administration will develop programs to speed retraining or reallocation of workers from jobs that will not be returning to the economy.

One of the challenges the Fed will confront is determining how much sectoral damage has been done, and the degree to which workers in the those industries have been sidelined — either because they lack the skills for available jobs, live in parts of the country where jobs are not growing, or choose to stop looking for work.

That uncertainty around labour reallocation is top of mind for Fed officials, who will need to make a call on when the post-pandemic economy is nearing “maximum” employment.

“This is unprecedented,” Fed Vice Chair Richard Clarida said on last week. “We don’t have historical episodes to look at. We are very alert to that risk.”

Least able to weather job loss

The sluggish recovery in hospitality has led to continued struggles for women, Hispanics and low-wage workers — three groups that are over represented in the industry and have been most affected by pandemic-related job losses.

Women hold slightly more than half of the jobs in leisure and hospitality, but are only 47pc of the overall workforce, according to Labour Department data. Hispanic workers account for 24pc of the sector, but only 17pc of the workforce. The majority of workers in the industry, 65pc, are in the bottom two income quartiles, according to a report from the University of Pennsylvania.

Workers with lower incomes and slim savings to fall back on may have a more difficult time waiting out long periods of joblessness and moving into new industries, economists say.

“The people who were least able to weather job loss, temporary or permanent, were the ones who were hit hardest,” said Valerie Wilson, director of the Economic Policy Institutes Program on Race, Ethnicity, and the Economy.

The December jobs losses do not bode well for the Garcias’ employment prospects.

After being told she is overqualified for jobs at fast-food restaurants and too inexperienced for roles at warehouses or in other industries, Garcia is hoping the casino, the only employer she’s had since she moved to the United States from Mexico a decade ago, will rehire her when it re-opens.

“Its very complicated to think about starting new somewhere else,” she said.

Published in Dawn, The Business and Finance Weekly, January 11th, 2021


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