It’s been almost three years since the pandemic knocked many businesses and their workers off their feet. With whispers of a 2023 recession in the air, lessons might be culled from how city economies are recovering.
Economy League of Greater Philadelphia recently released the report “Impact of COVID-19 on Urban Labor Markets” two weeks ago analyzing how the pandemic impacted labor in 20 major US cities. It found that overall, Philadelphia has seen a “modest” labor market recovery since the pandemic. But notably, around 43,000 jobs have disappeared since the beginning of the pandemic, ranking the city 13th of the 20 studied.
The report also dives deep into the leisure and hospitality sector and the education and health sector as industries that were especially impacted by COVID-19.
Philadelphia is the only city on the list with an education and health sector that hasn’t recovered its losses since the start of the pandemic, with a deficit of around 5,400 jobs in the sector.
What’s happening in Philly’s education and health sector?
Haseeb Bajwa, a PolicyHub research analyst at the Economy League, doesn’t know exactly why this is. He told Technical.ly these industries are strong and the Philadelphia economy relies on them — eds and meds, after all — so it could be that there are still institutions waiting to return to operating levels they were at pre-pandemic, and need more time to do so.
The leisure and hospitality sector in Philly is recovering more quickly than education and health. Compared to other cities, this sector is doing well. Bajwa said leisure and hospitality could be doing better than education and health because the latter has to be more careful about COVID-19.
“The nature of the work within health and education sector, they just have to be a lot more cautious in their approach to how quickly they can open up, how many people they can start employing and go back to the way things were before the pandemic,” he said.
He said leisure and hospitality could be doing better also because people couldn’t enjoy those activities at the height of the pandemic, so there was possibly a big push to drive growth in these industries.
“It’s mostly looking good that the number of establishments have not only bounced back, but in some cases, even gone beyond what they were back to the pre-pandemic levels, which is a sign that the economy is trying to respond to the negative effects of COVID and what it meant for the labor market,” he said.
Sign of economies to come?
Philadelphia has seen the lowest increase in total wages of the 20 cities reported on — around $1,250 per employed resident. The Economy League calculates total wages based on income and number of establishments, and Bajwa said the overall establishment growth wasn’t as high as other cities even though the wage growth was decent.
The analyst noted that people reading the report may be trying to get a sense of how the US economy is doing and if we’re in a recession or one is coming. But this report is a positive reflection of the state of the economy two and half years since the start of the pandemic, he said, and Philadelphia in particular could focus its energy on establishment growth.
He’s seen growth in the labor market not just in Philadelphia, but in cities across the country.
“Regional economies have responded relatively well in terms of taking care of the labor market,” he said. “And it’s another potentially positive indicator to look at as readers and policymakers are trying to grapple with the issue of how strong the US economy is right now.”
Sarah Huffman is a 2022-2023 corps member for Report for America, an initiative of The Groundtruth Project that pairs young journalists with local newsrooms. This position is supported by the Lenfest Institute for Journalism.