2021 starts with a whimper
by Eric Peterson, director of the Pelican Center for Technology and Innovation Policy
The New Year’s celebrations brought with it a hope that the turning of the calendar would leave the bad news of 2020 behind us. Unfortunately, some of the first economic reports of the year signal we still have a long way to go before the damage caused last year is finally in our rear-view.
First up, the Bureau of Labor Statistics reported that the number of U.S. workers on payroll decreased by 140,000 in December, although the unemployment rate remained unchanged. This was the first time the payroll numbers have decreased since May 2020.
Leading this decline was the leisure and hospitality sector which saw a decrease of nearly half-a-million workers in December. Of those half-a-million Americans who lost their jobs, 372,000 worked at restaurants or bars. It seems the uptick in COVID-19 cases and reemergence of economic shutdown policies has caused more than just health hardships and hit the food service industry especially hard.
Given Louisiana’s reliance on tourism and restaurants, it has been far from immune from this economic destruction. The last two weeks of unemployment claims for the state both came in over 20,000. These are the highest number of claims since November 14, when claims topped 43,000. The difference though is that the November claims were likely due to fraud, and the numbers returned to their average just one week later.
Louisiana has now had more than 20,000 unemployment claims for two weeks in a row. Unsurprisingly, the number of Louisianans collecting unemployment insurance has also increased for the first time in months.
Once again, Louisiana is facing a dual crisis. The public health threat and subsequent shutdown policies are leading many iconic local restaurants, bars, and other establishments to shut their doors for good. Policymakers need to ensure vaccines are being distributed as efficiently as possible to slow the spread of the virus, while also doing everything they can to let Louisianans return to work as quickly and safely as possible. We finally have the tools to defeat the virus, but we must be sure there is actually an economy to restart when this all ends.