Despite the unseasonably balmy weather across parts of the U.S. this week, a wintry chill could soon threaten to freeze job growth in its tracks, an analysis suggests.
“If retail and leisure businesses are unable to adjust to the coming drop in temperature, 1.4 million jobs that have been recovered in these sectors since April could be lost,” Luke Pardue, an economist with payroll processor Gusto, said in a recent report.
Since the nation’s unemployment rate soared to 14.7% in April, employers in the leisure and hospitality industries have rehired 2.8 million workers, according to Gusto, which looked at federal labor data. About half of those jobs have returned mainly thanks to more outdoor dining, a lifeline for restaurants that had been forced to close or halt indoor service.
“When customers aren’t patronizing a business that’s already cash-strapped, it won’t be able to keep on its staff,” Pardue told CBS MoneyWatch.
After the initial COVID-19 shutdowns this spring, retail stores, restaurants, bars, gyms and other businesses moved their operations outdoors to give themselves a fighting chance to survive after the coronavirus made it dangerous for people to congregate indoors.
“When you talk about the weather, it’s a major factor in maintaining our businesses as well as our jobs,” Dale Venturini, president of the Rhode Island Hospitality Association, told CBS MoneyWatch.
To encourage diners to continue eating out, RIHA launched a campaign called “Bring Your Own Blanket” in which it distributed 12,000 blankets to restaurants to hand out to diners as gifts in an effort to extend the outdoor dining season.
“Do I anticipate there will be jobs lost as the weather gets colder and we can’t sit outside? Yes I do,” Venturini said. “At the end of the day, the public will make that decision, and we are doing everything we can to make them comfortable and change people’s mindset about eating outside.”
“We haven’t seen anybody”
A manager at popular brasserie Red Stripe in Providence said she has already noticed a decline in the number of customers eating outdoors at the restaurant’s five sidewalk tables.
“In the last week we haven’t seen anybody sit outside, even with blankets to give away and two outdoor heaters. It’s been so cold at night people just are not having it,” she said.
Kate Turner, general manager of Mills Tavern, also in Providence, also worries outdoor dining is starting to lose its luster.
“The weather in Providence is unpredictable, and especially for the nicer, fine-dining restaurants, unless there is a very established patio and outdoor space, people don’t want to necessarily spend $50 on a steak they’ll have outside in the cold,” she said.
Not enough shifts
Job losses also could affect big cities such as Denver, Colorado, which is among the 10 largest cold-weather metropolitan areas in the U.S.
Business owners there are still reeling from a late October snowstorm that put a damper on outdoor dining. New restrictions on indoor dining capacity have compounded the situation.
“[Last] week we had our first cold snap and snowstorm and lost outdoor dining. Then Denver rolled back indoor dining to 25% — we were at 50%,” said Bobby Stuckey, a partner in Frasca Hospitality Group, with restaurants in Boulder and Denver.
Stuckey is already having to contemplate shedding workers. “We are trying to work with everyone’s schedule but obviously there will be people who don’t get full work in the next weeks because there are not enough shifts to go around,” he said.
