According to the Bureau of Labor Statistics (BLS) the US added a total of 7.5 million jobs in May and June, after suffering a massive wave of 32 million layoffs in March and April due to COVID (Chart 1). Mr. Trump gave himself laurels and markets (the only thing that apparently matters in this Brave New World) cheered loudly.
But let’s look beyond the headline numbers.
In March and April 2020 the economy lost 32 million jobs; 8.5 million of them where in the Leisure and Hospitality sector, accounting for 27% of all job losses. This same sector added back 3.5 million jobs in May - June (Charts 2 and 3) accounting for an oversize 47% of all jobs gained.
=> Keep this in mind: Leisure and Hospitality was 27% of all jobs lost, but 47% of all jobs gained back.
Let’s do a bit of math: in March - April the private sector lost 32 million jobs worth:
23.5 million jobs x 9 weeks x 34.4 hrs x $28 = $204 billion in non L&H jobs
Plus
8.5 million jobs x 9 weeks x 25.5 hrs x $17 = $33 billion in L&H jobs
for a total of $237 billion.
In May-June the economy gained 7.5 million jobs worth:
4.0 million jobs x 9 weeks x 34.4 hrs x $28 = $35 billion in non L&H jobs
Plus
3.5 million jobs x 9 weeks x 25.5 hrs x $17 = $14 billion in L&H jobs
for a total of $49 billion.
That’s a very long way from repairing the damage done to the real economy, no matter what Mr. Trump or stock indexes say.
(Looking at it another way, each job lost was worth $7.400, but each job gained only $6.500 - the economy is adding back mostly low value-added, low-paying jobs.)
Chart 1
But let’s look beyond the headline numbers.
In March and April 2020 the economy lost 32 million jobs; 8.5 million of them where in the Leisure and Hospitality sector, accounting for 27% of all job losses. This same sector added back 3.5 million jobs in May - June (Charts 2 and 3) accounting for an oversize 47% of all jobs gained.
=> Keep this in mind: Leisure and Hospitality was 27% of all jobs lost, but 47% of all jobs gained back.
Chart 2
Chart 3
Why is this important? Because those are part-time, very low paying jobs: On average, such employees work only 25.5 hours per week and make $17/hr. (Table 1). In fact, Leisure and Hospitality employees work the fewest hours and get paid the least wages of ALL employees. By comparison, the national averages for all private employees are 34.4 hours/week and $28/hr.
Chart 3
Table 1
Let’s do a bit of math: in March - April the private sector lost 32 million jobs worth:
23.5 million jobs x 9 weeks x 34.4 hrs x $28 = $204 billion in non L&H jobs
Plus
8.5 million jobs x 9 weeks x 25.5 hrs x $17 = $33 billion in L&H jobs
for a total of $237 billion.
In May-June the economy gained 7.5 million jobs worth:
4.0 million jobs x 9 weeks x 34.4 hrs x $28 = $35 billion in non L&H jobs
Plus
3.5 million jobs x 9 weeks x 25.5 hrs x $17 = $14 billion in L&H jobs
for a total of $49 billion.
That’s a very long way from repairing the damage done to the real economy, no matter what Mr. Trump or stock indexes say.
(Looking at it another way, each job lost was worth $7.400, but each job gained only $6.500 - the economy is adding back mostly low value-added, low-paying jobs.)
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