A recent report finds the “most well-targeted” federal assistance, especially in hospitality heavy, hard-hit metro areas, has been supplemental unemployment insurance. (Photo: Bridget Bennett).
Overlapping geography with race reveals the pandemic recession’s dramatic economic impact on Hispanic or Latino communities, reports Brookings Mountain West in a report comparing a half-dozen U.S. metropolitan areas, including Las Vegas.
Metro areas with above-average unemployment at the end of 2020 had almost three times the share of Hispanic or Latino residents as areas with below-average unemployment, according to the report.
“We find that the cities with industries more acutely impacted have a higher concentration of Hispanic or Latino residents,” reads the report, authored by Aaron Klein and Ember Smith, fellows at the Brookings Institution.
Tourism-dependent cities like Las Vegas and Orlando also tend to have larger Hispanic or Latino populations, while cities with below-average changes in unemployment like Seattle and Washington D.C. tend to have smaller Hispanic or Latino populations.
Las Vegas had the fourth highest unemployment rate of all metropolitan areas, over five points higher than the national rate in November 2020. Clark County, home to the Las Vegas metropolitan area, has a Hispanic and Latino population of about 33 percent.
Prior to the pandemic, Las Vegas had the second-largest tourism industry in the nation, which employed more than a quarter of the Las Vegas workforce in 2019.
Several cities faced declines in employment in the leisure and hospitality industry of 30 percent or more, including Washington, D.C, San Francisco, and Seattle. But since the hospitality sector employs only about 10 percent of the workforce in those metros, the cities did not suffer the same overall high unemployment.
In fact, metropolitan areas that specialize in technology, like Seattle with a Hispanic population of about 6 percent, tended to have lower unemployment than the national average and may have benefited from COVID-19, according to the report.
Relative to other industries, information technology has done well. Between February and April 2020, sales for non-store retailers (i.e., online shopping) increased by 15 percent — Amazon added 400,000 jobs, nearly doubling its workforce in response to the pandemic.
While the Las Vegas workforce concentration in the leisure and hospitality sector harmed its recovery, cities like Seattle with over two times more workforce concentration in their largest occupational group — computer and mathematical occupations — than the national average, recovered much quicker.
Seattle has more than four times as many employees in computers and math than Las Vegas and Reno, proportionate to the total number of workers in each metro.
Cities like Las Vegas and Reno with core industries negatively impacted by the pandemic also have a broader spillover effect into other sectors causing higher overall unemployment, in turn resulting in lower tax revenue and less spending, furthering inequality among cities with larger Hispanic and Latino populations.
Las Vegas, for example, has the second-highest concentration of jobs in hospitality and faced the second-largest increase in unemployment behind Atlantic City. The metro also saw larger declines in other industries compared to other metro areas. There was an employment reduction of 17.2 percent in the information industry from 2019 to 2020 in Las Vegas compared to a 5.4 percent reduction in Orlando, and 2.1 percent in Seattle. The professional and business service industry saw a decline of 13.8 percent in Las Vegas compared to 4.7 percent in D.C. and 2.8 percent in San Francisco.
“The pandemic’s economic geography magnifies existing disparities, exacerbating the racial wealth gap for Hispanic or Latino families. This is particularly concerning given that the federal government’s initial COVID-19 relief policies failed to appreciate the economic and geographic realities of this recession and were implemented in a way that reduced benefits for many Hispanic or Latino families,” reads the report.
More than half the federal coronavirus relief spending so far “went directly to businesses, many of which were not compelled to keep their employees or prove that they were negatively impacted by the pandemic,” the report said.
By contrast, “only about a fifth went directly to workers and families, and the aid that did was not always well-targeted.”
Researchers estimate that Paycheck Protection Program, forgivable loans offered to small businesses, saved fewer jobs than the anticipated 30 million in the first two months of the program, according to the report. Only about 2.3 million jobs were saved at a price of $286,000 each.
The “most well-targeted” assistance, especially in hospitality-heavy, hard-hit metro areas, has been supplemental unemployment insurance. Enhanced benefits did more to support the economies of Las Vegas, according to the report, and did more to help Hispanic or Latino workers who “make up a disproportionate number of claims given that they faced disproportionately high unemployment.”
The report recommends support that focuses on businesses in more impacted industries, like the hospitality and leisure industry, as well as to metro areas dependent on those hard-hit industries such as Las Vegas, Orlando, and Reno.
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