Economists foresee a long, slow rebuilding period following the devastation of the COVID-19 pandemic, with the replacement of lost jobs in Rhode Island taking place gradually over the next several years.
The state’s labor force had nearly 541,000 people in November, according to data from the R.I. Department of Labor and Training. That’s the lowest number of employed and unemployed workers, seasonally adjusted, in more than a decade. At the same time, there are about 16,000 fewer people employed, either part or full time, than a year ago.
While the unemployment rate of 7.3% in November is a marked improvement from the double-digits seen in the spring and summer, it remains higher than the 3.5% of a year ago.
Some sectors, such as hospitality, traditional retail and aerospace, were hit hard by the pandemic, which crippled industries, including air travel and tourism. In those categories, job creation will be challenging, said Edinaldo Tebaldi, an economics professor at Bryant University.
“Those sectors of the economy that employ a large proportion of workers who are less skilled … were hit very hard,” he said. “We should see job creation back in those sectors as the economy reopens, but it’s going to be very challenging. I don’t think we’re going to go back to pre-pandemic levels any time soon. It can take two to three years to fully recover those jobs.”
Employers and industry leaders say they expect to see little hiring through the first several months of 2021.
‘It can take two to three years to fully recover those jobs.’
EDINALDO TEBALDI, Bryant University economics professor
The hospitality industry had 18.9% unemployment in November, according to Dale Venturini, CEO and president of the Rhode Island Hospitality Association.
Consumer confidence will be important for the industry to rebuild, she said. Customers need to be aware and assured that restaurants are following health and sanitation protocols. Her prediction for 2021 is a moderate rebuilding of the industry.
“There is so much pent-up demand in people wanting to get out of the house, and wanting to do something,” Venturini said.
The most painful calls Venturini receives are from business owners asking her how they can help employees who have been laid off. Many employers, including the Kitsilis family, owners of Angelo’s Palace Pizza in Cumberland, have cross-trained employees to keep them working. When dining room sales slumped, many servers became delivery drivers or cooks.
After having to remove about 70% of their employees from scheduled shifts in the spring, with the onset of COVID-19, the restaurant and event business rebounded in the summer, stabilizing with the help of outdoor dining. Laid-off workers wanted to return, including college students, allowing the restaurant to expand hours.
But by November, sales had dropped by 20% to 30% as colder weather and a new surge of COVID-19 cases arrived, said co-owner Bill Kitsilis. He does not expect improvement in January or February. Dining room sales by November were just 5% of total sales, he said.
Which industries will expand or contract in 2021? The year will likely see an acceleration of existing trends, including the decline of physical retail stores, where sales are moving to online outlets, said Scott R. Jensen, DLT director.
But he is confident hospitality will rebound. “The demand will come back,” he said. “You can’t replace a restaurant or a hotel. But I do worry about cash flow. What will happen to many of the individual companies? And when the demand comes back, will it come back soon enough?”
Growth industries, he said, include businesses that can be done remotely and companies that have used remote technology to become more competitive and to create new business models.
In manufacturing, which was deemed essential and not shut down, the negative impact of the pandemic was seen through sales declines for some products. While employment hasn’t dipped substantially, the manufacturing sector is still not at peak efficiency – with machines out of production in many businesses.
Companies that supply the aerospace industry haven’t fully recovered, said David Chenevert, director of the Rhode Island Manufacturers Association.
The automotive industry and its suppliers, including some in Rhode Island, also have not rebounded yet.
Other companies are having some difficulty shifting their sales efforts to online platforms. RIMA is hosting a workshop in February aimed at getting more manufacturers comfortable with online marketing, Chenevert said.
The sales pitches have to change in 2021 to take the continuation of the pandemic into account, Chenevert said. “You have your own product line. But you still need to get that message out. And you can’t do that by going to any of [the traditional trade] shows. This is a new ballgame. You may not [be] doing shows until maybe the fall.”
Mary MacDonald is a PBN staff writer. Contact her at Macdonald@PBN.com.
