May 29, 2020
Just as the COVID-19 pandemic hasn’t affected all states equally, so it hasn’t affected all segments of the economy equally. Layoffs and furloughs have been concentrated in those segments that have seen the greatest impact of shelter-in-place orders, a new report from Yardi Matrix points out. That means retail, travel and entertainment establishments, and jobs in which social distancing is difficult.
The number of lost jobs has been higher among hourly low-wage workers in service jobs than among professional and salaried workers who can work remotely. On a proportional basis, job categories that shed the fewest jobs over the last three months are financial activities (-2.8%), government (-4.3%) and wholesale trade (-6.2%). Another segment that lost relatively few jobs was professional and technical services (-5.3%).
These numbers have implications at the local market level, and Yardi Matrix has analyzed the metro areas with strong concentrations in three employment segments that have lost the fewest jobs to date. These “Durable Employment Sectors”—government, finance, and professional and technical services—encompass a combined 23.5 million jobs in the top 50 metros, or 28% of the total 84 million jobs in those areas.
Metros with the highest percentage of durable jobs generally are home to a government capital, state university and/or strong presence of knowledge-based industries, says Yardi. Metros that have the most exposure to the study’s Durable categories are Lansing, MI (44.0%), Washington, D.C. (41.8%) and Sacramento (34.5%), all with federal or state government capitals.
“The Lansing/Ann Arbor metro also is home to the University of Michigan and Michigan State University,” Yardi reports. “Washington has for decades been among the most consistently performing U.S. metros for commercial real estate because of the stability afforded by being the capital of the U.S. government.”
Aside from federal employees themselves, the presence of government-related industries that include lobbying, legal, trade groups, foundations and think tanks gives the D.C. metro area an employment base that is extremely stable. “Sacramento, meanwhile, is the capital of the country’s largest state economy,” the report states.
Other metros that were near the top of the list include San Francisco (34.3%), Austin (33.2%), Raleigh-Durham (32.2%) and Boston (31.7%). All have high concentrations of finance and/or technology employment.
Metros with the lowest concentrations of Durable-sector jobs include Las Vegas (19.8%), Milwaukee (20.5%), Memphis (20.6%), the Inland Empire (22.1%) and Orlando (22.3%), which have few government jobs and employment concentrated in service industries or manufacturing.
Pictured: Lansing, MI.
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