December Job Losses in Leisure & Hospitality Eclipse Gains in Other Sectors – What Can Policymakers Do?

This press release was originally posted at cei.org.

The Labor Department reported today the economy lost 140,000 jobs in December 2020. Gains in various sectors were eclipsed by 500,000 jobs lost in the leisure and hospitality sector.

CEI senior fellow Ryan Young says policymakers should continue to clear away never-needed regulations and build in flexibility to future reopening plans:

“There is a small ray of sunshine from today’s jobs report: leisure and hospitality jobs are pandemic-sensitive. They’ll likely come back quickly as more people get vaccinated. Since other jobs are up by about 360,000, that means the rest of the economy is likely growing, if slowly. Officials should continue to remove never-needed regulations that continue to block businesses from adapting to consumers’ and employees’ changing COVID-era needs. 

“As the pandemic subsides, officials should allow flexibility for companies to set their own reopening policies. Reopening safely will require trial and error, which means error-prone policymakers should reject a top-down approach that would make it difficult to adapt as needed.”

CEI research fellow Sean Higgins points to lockdowns and restrictions as a big impediment for leisure and hospitality jobs:

“After months of jobs gains indicating the businesses and workers were adapting to the Covid-19 crisis, Friday’s report that economy shed 140,000 jobs shows the drag created by continual lockdowns and restrictions is starting to roll back those gains. The losses were concentrated in the leisure and hospitality fields, indicating those sectors are running out of ways to cope and are scaling back instead.

“Just two months ago the leisure and hospitality sector was leading job growth, having added 318,000 jobs in September. In November, that dropped to a mere 31,000 jobs gained; and in December, that same sector lost 498,000 jobs. Since February, employment in leisure and hospitality is down by 3.9 million, or 23.2 percent, accounting for more than half of the 5.7 million jobs lost overall since the pandemic started.

“Seasonal shifts account for part of the loss, but the shuttering of the economy severely exacerbated the situation. As the BLS report notes, 15.8 million people reported in December that they had been unable to work because their employer closed or lost business for reasons related to the pandemic, up one million from the previous month.

“The silver lining is that the economy can recover if given the chance. There is no substitute for letting people get back to work. Hopefully, as vaccinations accelerate, public officials will relent and let this happen.”

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