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Restaurant Jobs Growth Sputtered in July as Republicans Still Hold Out on $600 Checks

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Unemployment in food and drinking places fell more slowly last month to 21.8 percent, while the overall jobless rate dropped to 10.2 percent

The interior of a closed diner, where chairs are overturned onto tables and bottles of ketchup, salt, and pepper are still propped onto tables
The interior of Odessa, a diner in New York’s East Village
Gary He/Eater

U.S. jobs growth has slowed as COVID-19 infections continue to ravage the country. Unemployment remains higher now than at any point during the Great Recession. Black, Asian, and Hispanic people are still having a harder time finding work than white people. And joblessness in the hospitality industry remains at Depression-era levels. Those were some of the key takeaways from the U.S. Labor Department’s July jobs report, which comes as the expiration of $600 pandemic checks pushes millions to to the brink of poverty.

Yet as Americans continue to suffer financially — and physically, with new daily COVID-19 cases exceeding 56,000 — Republicans and Democrats continue to remain at an impasse over whether to extend that benefit.

Here are some of the specifics from this morning’s report: the economy gained 1.8 million jobs in July, which is welcome news, but that’s less than half of the 4.5 million jobs the U.S. gained in June. Unemployment fell to 10.2 percent. The deceleration in jobs growth was even more pronounced in the hospitality industry, with that sector’s unemployment rate only improving 2.3 percentage points to a still-ghastly 21.8 percent.

The previous month, the number of out-of-work individuals in food and drinking places fell by 8.2 percent. The July number was the slowest decrease in restaurant industry joblessness since the pandemic began. That’s not a surprise, as this was the first report to come as a resurgent COVID-19 virus continued to force hospitality closures throughout the country. This is also the first jobs report to tally numbers after New York City announced that indoor dining would be put on hold for the foreseeable future.

Employment gains were also, unsurprisingly, uneven across demographics. White people and adult men were the only two categories where the jobless rate fell below 10 percent.

Unemployment only fell to 14.6 percent for Black people, and to 12.9 percent for Latinx workers. And to further drive home how asymmetrical any type of recovery has been across groups, consider the following: Asian unemployment was 2.8 percent last June, well below that of any other group. Now, Asian joblessness is at 12 percent, an improvement from June, but still nearly three percentage points lower than for white workers.

Congressional Democrats are likely to use many of these points to hammer home the need for an extension of the $600 enhanced unemployment checks that lapsed at the end of July.

Democrats voted for an extension of that program months ago, while Republicans argue for a smaller benefit as they believe it discourages workers from searching for jobs — even though today’s unemployment report suggested that many jobs won’t be coming back anytime soon. The number of workers unemployed from 15-26 weeks more than tripled in July from 1.9 million to 6.48 million, while the number of workers out of work for over half a year continued to rise as well, albeit marginally, from 1.39 million to 1.5 million.

Out-of-work New Yorkers are about to experience their second week without the enhanced $600 jobless benefit, which means waiters and other workers will have to revert to state unemployment benefits that sometimes pay about half the local minimum wage or roughly $7.60.

New York jobs data, incidentally, won’t be released until later in August, but new unemployment claims for the city, and for statewide restaurant jobs, showed little week-to-week improvement over the last month. By the end of June, New York City unemployment had risen to 20.4 percent.

Any increase in unemployment would come at a tough time for city residents as well as a food infrastructure operating under stress. As of April 3.35 million more residents enrolled in SNAP, formerly known as food stamps, an increase of about 26 percent, according to government figures.

The city had about 800 food pantries, according to MarketWatch, before the pandemic, which folks rely on to make up for shortfalls in government assistance programs. By the peak of the local pandemic in April, about a third of them closed, according to the Food Bank of New York.

Even before the pandemic, over 27 percent of Bronx residents were earning poverty wages, per Census data. By the end of June, over a quarter of that borough’s residents were unemployed.

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