Bar and Restaurant Hiring Almost Came to a Standstill in August

The U.S. unemployment rate fell to 8.4 percent in August, its lowest level since the beginning of the pandemic. Still, overall hiring throughout the economy continued to slow, particularly in the COVID-19 battered hospitality industry. Permanent job losses skyrocketed from 534,000 to 3.4 million. The number of people unemployed longer than half a year increased for yet another month. Meanwhile, Black, Hispanic, and Asian people are still experiencing more difficulties finding work than white people.

Those were among the central takeaways from the latest Department of Labor jobs report, which comes as Republicans and Democrats remain at an impasse over legislation that would fund another round of enhanced unemployment aid, stimulus checks, and small business aid.

The mixed jobs report is certainly not what the New York hospitality industry wants to hear on the heels of news showing that nationwide consumer spending is increasing at a slower pace than before — and as restaurants in the five boroughs continue to cut jobs or extend furloughs as indoor dining remains on hiatus.

Here are some specifics from the August jobs report: The economy added 1.4 million jobs, down from 1.7 million in July and 4.8 million in June. Seasonally-adjusted hiring at food service and drinking places, in turn, nearly screeched to a halt, adding just 133,600 jobs, about a quarter of the previous month’s increase, and way down from the 1.47 million jobs gained in June. The unemployment rate for the hospitality industry dropped three percent, which still leaves it at a sky-high 18.8 percent.

The steep deceleration in hospitality hiring likely reflected a degree of uncertainty among operators following a summer plagued by bar and restaurant shutdowns across the country.

The Bureau of Labor Statistics will release New York City jobs data later in September. In July, unemployment in the five boroughs was double the national rate at 20 percent, with Bronx unemployment hovering at at Depression-era 25 percent.

By the end of July, only about half of the city’s bar or restaurant workers had jobs, with about 163,000 unemployed. Many of those cash-strapped workers could soon face the prospect of poverty as they enter their second month without $600 enhanced jobless aid. State unemployment benefits often pay less than minimum wage for many hospitality jobs.

Undocumented workers, who make up a sizable portion of restaurant-industry employment, are not eligible for most state or federal aid.

Per usual, the decrease in unemployment was uneven across demographic groups. Whites, adult men, and adult women were the only groups with unemployment rates below ten percent. Unemployment for Asian people improved, but to 10.7 percent, while unemployment for Latinx folks fell to 10.5 percent.

The jobless rate for Black people remained the highest for any group outside of teenagers, at 13 percent.

In another alarming development, the number of people unemployed for over half a year rose by 123,000 to 1.6 million. The number of folks out of work for three to six months also rose. albeit marginally, to 6.5 million. Those are reasonably small increases in the grand scheme of things, but the figures nonetheless reflect a steady rate of people who are unable to find work over the long term. That poses serious problems for consumer spending, housing — typically an individual’s largest monthly expense — food pantries, poverty relief, and the larger economy, especially in an era when additional government relief appears to remain a long ways off.