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Friday, March 20, 2020  01:05 PM  (31)

Estimated Employment Impacts of COVID19 Business Slowdown - March 2020

The full impact of the economic slowdown induced by the spread of COVID-19 will likely not be known for an extended period of time. But the directive from Pennsylvania state government on March 19 to close all non-life-sustaining business locations across Pennsylvania is directly impacting a large proportion of the business establishments and workers across the Pittsburgh region.  

The state issued an itemized list of industries that would be permitted to remain open at this time. This directive was used here to estimate the employment impact by industry across the seven-county Pittsburgh Metropolitan Statistical Area (MSA). In total, over 515,000 regional workers, or roughly 46% of the 1.13 million workers in the Pittsburgh region, are estimated to be directly impacted by the closure of non-life-sustaining business locations at this time. The table below itemizes this employment impact by industry within the Pittsburgh region.

Employment categorized as More Impacted reflects the total employment in industries that have been directed to close their business locations. Employment categorized as Less Impacted reflects the remaining employment in each industry. In reality, virtually all regional industries and all local employment is currently being impacted by regional and national economic adjustments caused by COVID-19. These estimates are likely the low end of the range of the cumulative economic impacts for the regional economy of southwestern Pennsylvania at this time. 

Estimated Direct Impact of Business Closures
Pittsburgh MSA, March 2020

* Modified to account for the closure of in-establishment dining.

This table was compiled from detailed employment data by industry for the 3rd Quarter of 2019, and the detailed guidance promulgated by the state of Pennsylvania. Per the state’s directive of March 19, 2020, the percentage of employment eligible to remain open was estimated for major industry groups.  Certain adjustments were made to the percentages estimated. Within Accommodation and Food Services industries, an estimated 78% of employees worked at establishments that were eligible to remain open. However, the largest employment within this sector includes full-service restaurants, which have been directed to close in-establishment dining in most locations. An assumption was made that half of the workers at establishments in this sector that were eligible to remain open were nonetheless impacted by temporary or permanent layoffs, or shifts to employment at home. These percentages were applied to the total employment in each industry to calculate the total number of employees in the two categories described earlier.

Employment data here was compiled from the Quarterly Census of Employment and Wages (QCEW) made available via the Pennsylvania Center for Workforce Information and Analysis (CWIA). The summary estimates here are impacted by the suppression of certain industry data due to confidentiality restrictions in the data provided by the CWIA. This table also does not estimate the impact of working from home or teleworking that likely has expanded across all industries, to include those not specifically directed to close their business locations. As such, it also does not estimate what percentage of workers are likely to continue receiving pay as a result of these employment shifts.

While a large number of workers being impacted by the business slowdown will continue to receive pay the region can likely expect a significant increase in the number of unemployed workers. While some workers have shifted to working from home with pay, many of the most vulnerable industries will likely be laying off workers without pay. Workers expecting to be recalled from temporary layoff are counted as unemployed whether or not they have engaged in a specific job seeking activity.

This data is an initial estimate of the impact of ongoing impacts of COVID-19 on the Pittsburgh region. Ongoing work will include updates to this table and further analysis of indirect and induced economic impacts as they evolve in the future. 

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