The American Economy During the Pandemic: Are Restaurants, Gyms, Bars, and Hairdressers the Major Employers?

Introduction

The question of whether restaurants, gyms, bars, and hairdressers represent the major employers of the U.S. economy during the pandemic is a complex and multifaceted one. This article delves into the nuances of these segments of the workforce, examining their roles and the economic impact of the pandemic on them.

The Predominant Picture

When examining local employment statistics from city, state, or regional chambers of commerce, the largest employers are typically government-related. This includes both direct government roles (such as post offices, federal agencies) and quasi-governmental entities (like the IRS). Education sector, heavily supported by government funds, also ranks high. Following these, Walmart and manufacturing sectors emerge as significant employers. The food, gym, cosmetics industries, and the like, although crucial for supporting basic needs, often take a backseat in terms of employment statistics.

The Shift to Service-Based Economy

In recent decades, the U.S. economy has undergone a significant transformation, becoming increasingly service-based. Uniquely, services like haircuts, for example, cannot be easily outsourced to other countries. Service workers, while vital, often face poor pay and rely heavily on tips. Any disruption in their work hours can lead to swift economic stress.

The Pandemic's Impact on the Service Sector

The pandemic has had a profound impact on the service sector, particularly on restaurant, bar, and gym industries. These establishments are integral parts of a complex supply chain that stretches from raw material procurement to finished products. Restaurants, for instance, rely on supply chains that start from farm gates, through various processing stages, and involve extensive transportation networks.

The disruption in consumer behavior, such as cooking at home, has led to significant shifts in demand, causing supply chain imbalances. For example, toilet paper shortages in supermarkets during the early stages of the pandemic were a direct result of the inability to divert production and packaging to meet new market demands quickly.

Similarly, the food service industry, where a significant percentage of products are consumed out of home, faces challenges in adapting to changes in consumer behavior. This is evidenced by the struggle of farmers to keep up with demand for meat as restaurants and other food service providers were forced to close. The push to other markets often leads to economic dissatisfaction for farmers and commodity traders alike.

The Web of Supply

Bars, gyms, and personal care services also form intricate webs of supply. The closure of these establishments not only affects direct employees but also disrupts the entire supply chain supporting them. This interconnectivity underscores the broader economic impact of pandemic-induced shutdowns.

In conclusion, while restaurants, gyms, bars, and hairdressers are indeed significant contributors to the American economy, they do not represent the major employers as the statistics suggest. Government-related entities, education, and retail manufacturing sectors typically hold a stronger position in employment numbers. The service sector, including these industries, remains crucial for the well-being of the economy, albeit with higher levels of vulnerability during crises.

Conclusion

The pandemic has exposed the fragility and interconnectedness of the service-based economy in the U.S. Understanding and addressing the challenges faced by these industries is critical for economic recovery and resilience in the face of future disruptions.