Economic Snapshot | Wages, Incomes, and Wealth

Help (not) wanted—service sector no respite for unemployed

A weekly presentation of downloadable charts and short analyses designed to graphically illustrate important economic issues. Updated every Wednesday.

Snapshot for November 14, 2001.

Help (not) wanted—service sector no respite for unemployed
Recessions invariably mean lost jobs for many Americans, and households that experience job loss will have to cope with the loss in income. Typically these households have used a variety of strategies to cope with the financial hardship of unemployment. Many workers will file for unemployment insurance benefits, but most will not be able to receive them due to the myriad rules and regulations governing the system. Some workers will spend their savings, sell their stocks, or tap into their retirement funds in order to make ends meet. For many workers, savings will be tapped out long before the recession ends. The still-employed spouse of a laid off worker may have to take on more hours or a second job to help a household make ends meet.

Share of total workers employed in hotels or eating and drinking establishments, 1972-2001

In the past, many of the jobless found temporary employment in the lower wage service sector. As the figure shows, hotel and restaurant employment increased as a share of the labor force during most of the previous recessions. Unfortunately, this sector has not seen much job growth since 1997, and the tragedies of September 11 have resulted in large-scale job loss in these sectors. Consequently, these industries, once a safe haven for those recently laid-off, will shed workers, only adding to this recession’s list of economic woes.

This week’s Snapshot by EPI economist Jeffrey Wenger.

Check out the archive for past Economic Snapshots.

See related work on Income and wages | Wages, Incomes, and Wealth

See more work by Jeffrey Wenger