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Drop in Boston unemployment towards end of 2020 masked the numbers of people who just gave up, report says

Chart showing drop in payroll in Boston over 2020

From BPDA report.

The BPDA says unemployment in Boston dropped from a peak of 16.1% in June to a still high 7.4% in December - but in a new report says there's an important caveat with that decrease:

Downward movements in the unemployment rate in the fall were driven more by people leaving the labor force rather than returning to employment. Job growth slowed in the fall but reached 358,000 employed Boston residents in December - about 26,500 short of February levels.3 In December there remained 29,328 unemployed Boston residents, plus an estimated 7,000 Boston residents who appear to have left the labor force since February 2020, meaning they are not working or actively looking for work.

The BPDA adds:

As in any recession, workers may leave the labor force and stop actively looking for work due to pessimism about the likelihood of securing employment. However, the COVID-19 pandemic has brought additional obstacles to employment. Some workers may have left the labor force during the pandemic due to illness or fear of contracting the virus. Additionally, most schools and many child care facilities have been closed during the pandemic, forcing many parents to adjust their employment in order to care for their children. National data show that labor force participation of parents, especially mothers of young children, fell during 2020.

Not surprisingly, the effects of Covid-19 dominated the BPDA's annual look at the Boston economy, out last week.

Also not surprisingly in a major tourist city, hotel and food-service workers were particularly hard hit - at one point 51% of all Bostonians working in these fields had filed for unemployment. Next was retail, at 21%. Arts and entertainment and transportation and warehousing also saw significant decreases, although they employ fewer people, so the total numbers are not as high.

Even "health care and social assistance" saw a 3.3% decrease in estimated employee numbers for the year (final, actual numbers for the year will be released in June).

Hotel occupancy rates, which cratered in March, then started to slowly rise again, collapsed once more during the post-Thanksgiving Covid-19 surge, the report says.

Key Boston employment sectors, ranked by changes in employment numbers
Logan saw dramatic decrease in numbers

Along with this came increases in the number of Bostonians living below the poverty line. Between March and December, Greater Boston Food Bank locations provided 500,000 pounds of food a week - up from 353,000 pounds of food a week in 2019. The number of SNAP recipients in the city increased 17.7% from January to December.

The report adds small businesses were particularly hard hit:

Small business revenue in Suffolk County fell by two-thirds from January to April 2020. As of the end of December, small business revenue in Suffolk County was still down by 60 percent compared to January levels. Revenue for small businesses in the leisure and hospitality sector fell by 87 percent in April and is still down 75 percent in December. Revenue for small businesses in the retail and transportation sectors fell by 63 percent in April and was still down 53 percent in December.

Also:

Overall consumer spending by residents of Suffolk County was more negatively impacted compared to spending by Massachusetts residents, perhaps in part because the unemployment rate in Suffolk County has been higher than that of the state as a whole. As of December 26, 2020, overall consumer spending by Suffolk County residents had risen to around 1 percent below January levels, while consumer spending by Massachusetts residents had increased to 3.7 percent above January levels.

"Time spent in workplaces fell more sharply in Suffolk County than in other parts of the country" - 70% in the spring, 50% in the fall, compared to a national drop of 50 to 30% nationally.

Collapse in number of people coming into Boston for work

MBTA ridership plummeted as well, which could be an issue as the local economy recovers, if people remain uncomfortable taking the T:

Public transit is essential if Boston is to regain the jobs lost in 2020 and return to its pre-pandemic growth trajectory.

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