Gen Z workers in southwest Ohio crushed by coronavirus downturn

The coronavirus-induced economic downturn has struck young workers across the region and state particularly hard, which could have a long-lasting impact on the earnings and work lives of members of Generation Z.

Ohioans and Miami Valley residents between the ages of 16 and 24 accounted for 16% of initial jobless claims filed last month — more than double their usual share, according to data from the Ohio Department of Jobs and Family Services.

These young workers, most of whom are part of Gen Z, are heavily employed in industries that have been crushed by the COVID-19 shutdown, including leisure and hospitality and retail trade.

Ohio is gradually reopening in phases with new restrictions on business operations, but big questions remain about when and if young people who were laid off will get back to work.

“It’s important that as a community we look for ways to hire, re-hire and support this critical demographic,” said Chris Kershner, executive vice president of the Dayton Area Chamber of Commerce. “Young professionals are innovative and dedicated team members in the business community. Dayton area-businesses need our young professionals and our young professionals need to be supported by our businesses.”

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Generation Z — people born after 1996 who are under the age of 24 — were on track to inherit a strong economy with record low unemployment. That was a much better climate than the one the previous generation, millennials, faced at the same point in their lives, since they came of age during the Great Recession, according to the Pew Research Center.

But then came a global pandemic that capsized the economy.

And though COVID-19 is most dangerous and lethal to older Ohioans, it seems to be causing younger workers some of the most severe economic pain.

In April, more than 83,800 Ohioans between the ages of 16 and 24 applied for initial unemployment benefits, according to the Department of Job and Family Services.

This included about 11,255 laid-off young workers in Butler, Champaign, Clark, Greene, Miami, Montgomery and Warren counties.

Last month, young workers accounted for 15.9% of all claims filed statewide and 16.1% of claims filed in this region.

That’s not normal: In 2018 and 2019, workers in this age group accounted for less than 8% of new unemployment claims locally and across Ohio.

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One of the main reasons young people are losing jobs at higher rates than normal is because they are more likely to work in the service sector.

Before this crisis, about 19.3 million Americans ages 16 to 24 had jobs, and nearly 44% worked in retail trade and leisure and hospitality, according to the U.S. Bureau of Labor Statistics.

Young workers account for about one-third of all U.S. leisure and hospitality employees and even larger shares of food services’ and drinking places’ labor forces, the data show.

Many young people get their first job in the restaurant business, because it is a no-barrier industry where anyone can learn to work, said Homa Lily Moheimani, media and communications manager for the Ohio Restaurant Association.

Bars, restaurants and retail were decimated by the coronavirus lockdown: Ohio lost nearly 824,000 jobs in April, and the leisure and hospitality sector accounted for nearly one-third of the cuts, according to state data released Friday.

Retail trade lost nearly 76,000 workers last month.

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Many establishments and retailers have or will soon reopen, but with reduced capacity to comply with social-distancing rules. Food and drink establishments were allowed to resume dine-in operations on Thursday.

Some workers are being re-hired, but there’s no telling when payrolls will more fully recover, especially given new restrictions on operations and some people’s reluctance to go out while the threat of infection remains.

Long-term pain?

Historic data indicates that a layoff early in workers' careers can have long-lasting negative effects on their earnings, but that depends on how long the unemployment lasts, said Richard Stock, director of the Business Research Group at the University of Dayton.

During economic downturns, people who suffer job losses tend to be out of work for longer periods of time, and they tend to experience lifetime earnings losses of about 19 percent over the following twenty-five years, according to the Hamilton Project at the Brookings Institution.

In addition to earnings losses, job displacement for economic reasons increases the likelihood of subsequent unemployment and lower job quality when re-employed, some research suggests.

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But Stock said this specific economic crisis is different from any other, and it’s unclear whether the massive job losses will be mostly temporary or of longer duration.

“If it persists to the degree of a regular recession, then yes, we expect the effects to have a longer-term impact on people’s incomes,” he said.

Stock also analyzed initial unemployment claims in March and April and found that more than 21% of the local labor force 44 and younger filed for unemployment.

In comparison, less than 17.6% of the 45 and older labor force applied for unemployment benefits.

This crisis hit at the wrong time for college graduates, who during the spring and summer begin their post-academic job search, said Andrew Beauchamp, associate professor of economics at Wright State University.

The food service and restaurant industry employs many young people, because they are entry- level jobs. But these jobs provide young workers extremely valuable experience and soft skills that tend to be transferable and relevant to other industries, Beauchamp said.

“This is a key time,” Beauchamp said. “Certainly, young people have time to bounce back in terms of getting back on a good trajectory, but the concern is long-term, these are important years.”

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Young people just beginning their careers need to build their resumes, and since they are new or semi-new to the labor force, they probably don’t have the same kinds of relationships with employers as longer-term workers, he said. This means they may not be the first workers who are rehired.

But Beauchamp said there are reasons to be hopeful.

Demand for dining and drinking out could come roaring back if establishments can adapt, possibly by using outdoor seating and other changes, he said.

Locals over the age of 18 who have been laid off can qualify for training grants, if they want to build skills either in their current fields or train for a transition to a new field, said Garth McLean, interim director of workforce development with Montgomery County Business Services.

The workforce development department works with many local businesses on recruiting, meaning it has a good idea of available jobs, he said. The department helps people prepare to apply for jobs, with resume building and job interview training and practice.

“If anyone is looking for work, no matter their age, we can connect them to open job opportunities,” McLean said.

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