Sector Share of County Claims in ND – Accommodation & Food Service

The radio discussions included significant discussions of sectors and how they are holding up under the current situation. A natural industry to start with is Accommodations and Food Service. Why?

A great deal has been made at the national level about the differential impacts of COVID-19 across the income and skills spectrum. These tend to be lower skilled positions and therefore they tend to pay less. The North Dakota data bear this out with the mean and median hourly wage at about half the general level for the state as a whole across all sectors. As a result, this sector seems to be a reasonable starting point as we look at the various sectors.

It is also the case this sector would be very likely to feel impact from the situation with COVID-19. It is a health issue and raises questions about the amount of time people spend out of the house, and their willingness to engage in purchases of prepared food from out of their residence. Travel (the accommodation part of this) is also down as a result.

The spread of this is quite interesting. The larger metropolitan areas experienced high percentages of claims in this sector. These are the share of each county’s claims by sector of work. For many areas this sector was hit he hardest, in terms of initial claims. It is obvious that other sectors were hit hard in other regions, mining in the Bakken area as an example.

There are a significant number of counties that experienced more than 20% of the total county initial claims in the accommodation and food service sector. Why split the data out in this fashion?

There is too much acting like there is one policy option to solve the economic problems we face currently. Different sectors face different manifestations of these issues. Would we suggest the same solution for counties with vastly different employment compositions? I would like to think not. That does not mean that we have the ability to tailor policy to each county sector, though for this sector it is likely the case the service provision is uniform enough to allow one policy, if we chose to act.

This is a sector that may yet experience significant failures going forward. The fact is consumer behavior is changing, and is volatile, in a way that was not possible to predict and remains difficult to evaluate at best. Many of these businesses will face volatility from public policy action or inaction, and must confront the reality of the sales level below which they will need to shut down.

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