As the economy slowly recovers, beach towns are in trouble but tech hubs might actually be okay

Atlantic City, NJ
  • Brookings used BLS employment projections to see how growth in cities may change after the pandemic.
  • The report finds some tech cities and university towns may not see that big of a difference.
  • Tourism-heavy cities like Atlantic City, New Jersey may see the biggest differences.
  • See more stories on Insider’s business page.

A new metro area and state analysis from Brookings finds employment in all cities will be affected by the long-term outcomes of the pandemic, but places that rely on tourism could be hit especially hard.

Mark Muro, senior fellow and policy director of the Metropolitan Policy Program at Brookings, and research assistant Yang You published a new report about how employment may change across the US based on recent 2019-2029 projections calculated by the Bureau of Labor Statistics.

The new projections analyze how employment may in various industries and occupations could grow or shrink over the decade given long-term changes in behavior from the pandemic, such as people continuing to avoid large crowds and more telework.

“While we’re all expecting and hoping for a very robust, near-term recovery from the [COVID-19] crisis, we shouldn’t forget this longer-term potential aftereffect that in some places could really, be painful,” Muro told Insider.

The Brookings report shows that across US metro areas, employment is expected to be lower in 2029 than it would have been without the pandemic, but some metro areas have larger differences.

“Places that are heavily specialized in accommodations or food services, or arts and entertainment, or retail will themselves feel some slowing from the baseline,” Muro said based on BLS‘ expectations of what employment will look like by industry in the long term.

“Those economies are very cyclical anyway, and they may be subjected now to an additional, fairly substantial drag, according to the BLS numbers,” Muro told Insider.

The following chart highlights the five cities where difference in employment growth between the baseline and strong impact scenario are the largest:

Many of the places that may see the largest changes to employment are tourism and vacation destinations. This includes places like Myrtle Beach, South Carolina; Atlantic City, New Jersey; and Las Vegas. The chart shows Kahului, Hawaii, and Atlantic City, New Jersey, have the largest percent differences among the metro areas at -3.6%.

On the other hand, Brookings notes the places with the lowest percent differences are a mix of metro areas that are big in tech and manufacturing as well as “university towns strong in science and IT,” such as Ann Arbor, Michigan.

The following chart highlights the five cities where differences in employment growth between the baseline and strong impact scenario are the smallest:

The chart shows Trenton, New Jersey, has the smallest percent difference among the metro areas at -1.1%, where projected 2029 employment in the strong impact scenario is around 3,200 lower than the baseline scenario of around 291,000. Among the 384 metro areas, 298 of them have percent differences below 2.0%.

It is important to note the BLS projections are just estimates and could differ from what actually pans out between 2019 and 2029. Muro said government responses and changes by policy makers can help places that may see the largest percent differences.

“There may be particularly successful policy interventions that help these places with these sorts of industries and workers,” Muro said. “So all of those things could happen, and that could change the picture. What further government response there is might make a difference.”

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States with tech-heavy economies could see less long-term damage to their job markets from the pandemic

Las Vegas
  • BLS published employment growth projections that take into account the impact of the pandemic.
  • Brookings used those projections to see how growth differs from the baseline in different states.
  • Tourism-heavy states, like Nevada, see the biggest percent differences.
  • See more stories on Insider’s business page.

DC and Massachusetts may experience smaller changes to their employment growth because of the pandemic than other states, based on a new Brookings report.

Mark Muro, senior fellow and policy director of the Metropolitan Policy Program at Brookings, and research assistant Yang You looked at how employment may change across the US over 10 years.

The analysis is based on the Bureau of Labor Statistics’ recent projections that consider how the pandemic may affect employment. The two alternate scenario projections from BLS take into account how potential changes in business and consumer behavior from the pandemic may affect employment in the long term.

For instance, BLS expects there to be a continued increase in telework and as a result more demand for tech jobs, like information security analysts.

Brookings’ analysis finds all states and metro areas will see less employment from what was originally projected, based on the percent differences between the pre-pandemic baseline and BLS’ estimates for how employment in different occupations could grow and shrink. However, some states will see greater differences.

Muro and You’s analysis finds that states where there are more opportunities for tech and science employment may see smaller declines in employment. Meanwhile, states with economies that rely on sectors that are expected to see larger drops in employment like accommodation and retail, may be more heavily affected.

The following map highlights the differences in employment between the pre-pandemic baseline and BLS’ post-pandemic projections by state from Brookings’ analysis:

Muro told Insider that most of the differences are modest. The map shows that DC has the smallest percent difference at -1.1%, where employment in the strong impact scenario in 2029 is projected to be around 9,500 lower than the baseline scenario of around 861,000 total jobs in the nation’s capital. Twenty-three states have percent differences of no more than -1.7%.

On the other hand, Nevada has a percent difference of -3.0%, where projected 2029 employment in the strong impact scenario is about 49,000 lower than the baseline of 1.6 million. Hawaii and Florida also have large percentage differences compared to most of the other states.

“This is evidence for the need for some of these vacation and tourism-oriented communities to consider ways they can diversify because this looks like a picture of a sustained, not calamitous, but very real kind of softening,” Muro told Insider.

Hawaii and Nevada are already considering ways to diversify the economy after their tourism-dependent economies were affected by restrictions during the pandemic, like casino closures in Nevada.

As Insider’s Aki Ito previously reported, Hawaii Gov. David Ige said in January that the state has to “diversify” its economy after the state’s tourism industry took a hit as a result of travel restrictions during the pandemic. In particular, Ige said he “will continue to promote technology-driven diversification of our economy.”

The Associated Press reported that Nevada Gov. Steve Sisolak similarly wants to diversify the state’s economy. This includes increasing its presence in the technology sector through Innovation Zones, which would give tech companies similar power to a county government, AP writes.

It is important to note the BLS projections may not be exactly what the employment situation looks like over the next decade but could give some indication of what to expect.

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