A business owner and a labor economist are hesitant to praise the large jobs recovery in June and are pinpointing weaknesses in the US economy as it continues the uphill battle against the coronavirus pandemic. (July 2)
PETER KLAMKA: I think tourism has been left out of that increase in jobs. I think the hospitality industry is going to continue to suffer. I think we are going to see more layoffs. What I'm doing now is building a business model that works in this new era, and that means delivery. That means outdoor dining. That means a really reduced staff. You definitely do not need the same amount of people that you had back in January or February in any restaurant-- not just mine, not just Las Vegas, anywhere in the country. We also have no business travel going on. The fact that you and I are talking on Zoom, companies are now talking on Zoom. You have no conventions going on.
JULIA POLLAK: Also, the bulk of the job gains were in leisure and hospitality-- so restaurant workers, bartenders, people like that. And we now know that since the really-- since the reference week in this report, many workers like that have been told to go back home. I'm very worried about the July report for a couple of reasons, and one is the rise in case counts. The other is that the longer people remain on temporary layoff, past research shows in past recessions, the lower their chance of re-employment becomes.
The labor market has been turned on its head. Before this crisis, there were a million more job openings than unemployed workers. Now there are millions more unemployed workers. And so it'll be harder for each one to find work-- the job search may take longer, because there are just fewer opportunities out there. Some people have dropped out of the labor force entirely. They may never come back. They may end up on disability insurance for the rest of their lives. We may see a permanent decline in productivity there. We need to do everything possible to get America back to work, and now is not a time to be complacent.