Recessions negatively impact many types of jobs found broadly within the Bureau of Labor Statistics’ (BLS) list of industries. Now, as we all brace for another round of layoffs, certain industries may, unfortunately, feel the pinch while others will fare somewhat better. Here’s our breakdown of which industries will be most affected by a recession.
The retail industry is one of the nation’s largest sectors for employment, with an estimated 15.6 million employees. With that kind of employment, retail workers make up over 11% of the U.S. workforce.
In many recessions, the retail trade is hit hardest once those individuals shoppers begin losing jobs. When these issues arise, it makes sense for most people to cut out frivolous spending such as expensive clothes and beauty supplies.
BLS data shows unemployment in the retail sector jumped from 4.5% in February 2020 to 5.3%in March 2020.
Restaurants and Bars
The foodservice industry quite often takes a hit during economic downturns. In the aftermath of the 2008 recession, numerous restaurant chains simply went out of business. Others were forced to cut their labor costs by laying off workers. Thousands of restaurant employees lost their jobs—although many did regain employment within the industry as the economy began to recover a few years later.
Our current recession doesn’t bode well for this industry, which already operates on thin profit margins just barely exceeding 6% of annual sales, on average.
According to the BLS, the foodservice industry employed 12.2 million people in February 2020. Note the past tense. Once business shutdowns went into place, layoffs and furloughs happened almost immediately. This BLS data also shows foodservice employment fell to 11.8 million, with the unemployment rate increasing from 5.7% to 8.5%.
There is a small silver lining in this industry, however. Fast food restaurants tend to be impacted less during most recessions. Some, actually even thrive under these conditions, as people are more likely to spend less on food and will often turn to cheap, quick alternatives when they can’t afford to eat out at high-dollar, sit-down restaurants. Still, fast-food restaurants tend to be the lowest-paying in this industry, making them a poor long-term career path for most people.
Leisure and Hospitality
Unfortunately, quarantine and travel restrictions during the COVID-19 pandemic significantly impacted the leisure and hospitality industry. Hotels and rental car companies suffered massive declines in revenue.
The 2008 recession also negatively impacted spending on leisure and hospitality – Even major players like Disney were forced to lay off workers or significantly reduce hours.
BLS data shows this sector shed around 450,000 jobs between February 2020 and March 2020. The unemployment rate among these businesses jumped from 5.7% in February to 8.1% in March, revealing just how fragile the industry is to major changes in broader economic situations.
Other Recession-Vulnerable Industries
Retail, restaurants, and hotels aren’t the only businesses often hurt during a recession. Automotive, oil and gas, sports, real estate, and many others see heavy declines during times like these. The recession brought on by the coronavirus pandemic may be unique, but many of these industries are facing pitfalls during previous recessions.
But, as we mentioned earlier, not everything is doom and gloom. Certain industries are riding the wave and adapting fairly well.
Technology Is (Fairly) Recession-Resistant
Things are clearly very different in the technology sector. The 2008 recession and the COVID-19 downturn have shown that technology-sector jobs tend to offer strong employment barriers against job loss.
With more people working fully remote, the Internet and almost every device, app, and platform made surrounding it has seen growth. This growth leads to more money toward research and development, more money toward advertising, and, of course, more money toward talent that can get the job done.
Is the tech industry completely immune to economic hardships? Certainly not -the 2008 recession saw a decrease in the hiring rate in the industry. But according to CompTIA CEO Tim Herbert, the industry survived The Great Recession “reasonably well”, something many other industries’ CEOs wouldn’t be able to claim.
Want to Join the Tech Industry?
Recessions come and go. But there are proactive things you can do to deal with the present and prepare for the future. For example, since tech industry jobs tend to be a safer bet than some other industries, getting geared up to enter into this workforce may be something to consider.
Right now, you can learn the programming skills that are still heavily in-demand, all from the comfort of your own home. There are tons of educational options out there. What’s more, certain programs can help you get started without paying out of pocket. Even better, some don’t have you pay for your learning until you land a good-paying job.
For example, we at Kenzie Academy offer online courses to give you the coding skills required for jobs in Software Engineering and UX Design. If you get started with us, you can become job-ready in just 12 months and graduate with a professional network and job search assistance.
Whatever you choose to do, just make sure when the next recession comes (and it will), that you’re well-positioned in an industry that can ride the wave.
Ready to jumpstart your career as a UX Designer or Coder? Learn more about our 12-month Software Engineering and UX design programs, or check out our free beginner’s coding program Kenzie Free.
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