As people look ahead to a post-COVID future, some see trends taking shape which could produce long-term structural changes in U.S. employment. A new study anticipates that for the remainder of this decade changes in consumer behavior will slow employment growth in many industries and occupations while accelerating employment in others.
Emerging Trends in Consumer Behavior
Published last month by the U.S. Bureau of Labor Statistics (BLS), the study sees increased telework as a primary driver of economic change impacting jobs. With sustained teleworking, the spending for trips to offices, including commuting costs and business travel would decline, as would lunchtime and after-hours restaurant spending. The jobs associated with those travel and dining services are expected to be impacted negatively. Plus, the overall demand for office space is expected to decline, impacting new nonresidential construction.
The BLS anticipates that the other major trend slowing employment growth is consumer preference for avoiding interpersonal contact. Social distancing leads to less demand for restaurant dining, travel, and accommodations. It also leads to declines in employment for industries that depend on larger gatherings, including live sporting events, movies, and concerts.
On the positive side, the BLS study identifies a number of industries that are projected to see accelerating growth in employment:
Increased telework will drive demand for information technology (IT) and computer-related occupations, particularly those involved in IT security.
Avoiding interpersonal contact will also drive IT employment to support more virtual services, including telehealth, and the automation of many in-person customer service positions.
Changes in food consumption as a result of lower restaurant spending will lead to more spending and employment in grocery stores.
Public demand for better prevention, containment, and treatment of infectious diseases is also expected to lead to increased scientific and medical research funding.
Employment in residential construction is projected to grow faster, partly offsetting some of the negative effects on the construction sector.
Employment Growth in Industries and Occupations
Employment overall will still grow in the coming years, but many industries and occupations will see slower growth than they would have without COVID, while others will accelerate. What’s especially interesting about the BLS study is how the outlook for different industries and occupations might reflect long-term structural changes in our job market – and how those trends could affect the economic vitality of states and metro areas.
The BLS study concludes that employment growth this decade may be depressed as much as 5% in some industries and occupations due to the pandemic. A few industries and occupations are projected to see even greater slowdown in job growth, but most will see reductions between .5% and .8%, while a few could see accelerating growth. Note that the BLS analysis did not factor in the impact of the $1.9T American Rescue Plan, which is expected by many to accelerate employment growth in the near term.
The industries most vulnerable to negative impacts, according to the BLS, include among others:
Accommodation and food services
Arts, entertainment, and recreation
Retail trade
The most vulnerable occupations, among others, are:
Food preparation and serving
Sales
Construction and extraction
The industries projected to see the most accelerated growth, according to the BLS, are:
Professional, technical, and scientific
Information
The occupations projected to see the most accelerated growth are:
Computer and mathematical
Life, physical, and social science
Employment Growth in States and Metro Areas
To assess the impact of emerging consumer trends on states and metro areas, Brookings analyzed the BLS data to identify more and less vulnerable regions. Key findings from the Brookings analysis:
Across states, tech- and science-oriented locations such as Massachusetts, New York, and Connecticut stand to see relatively smaller employment slowdowns.
Conversely, Sun Belt and tourism-centric states such as Florida, Hawaii, and Nevada—which rely heavily on accommodation and food services, entertainment, and retail—could see depressed employment growth over the decade.
For metro areas, the least negatively affected are tech centers (San Jose, CA; Washington, D.C.; Boston, MA), university towns strong in science and IT (Trenton, NJ, Ann Arbor, MI; Durham, NC; Boulder, CO), and manufacturing hubs (Elkhart, IN; Dalton, GA; Battle Creek, MI)
The most negatively impacted metro areas are almost exclusively Sun Belt or beach-based leisure and vacation centers, including Atlantic City and Ocean City, NJ; Kahului (Maui), HI; and Las Vegas, NV.
It will be interesting to see what long-term structural changes in U.S. employment may emerge during this decade of recovery from the pandemic – and from other unanticipated market disruptions. For different regions of the country, however, these analyses deserve particular attention – for some to leverage the opportunities before them, and for others to address the challenges they face.