Central Ohio lost tens of thousands of jobs and many small businesses in 2020 because of the coronavirus pandemic. Bill Lafayette, economist and founder of Regionomics, says the COVID-19 vaccine offers hope that the economy can recover in 2021.
“Our sense of well-being has been fundamentally shaken,” Lafayette says. “We need that to come back.”
Lafayette says many restaurants, which had to shut down for a time this year and then operate under an ongoing 10 p.m. curfew, are hanging by a thread.
“They are in serious trouble, our arts organizations are in serious trouble, and they are at this point on life support,” says Lafayette. “And I worry that some of them will be casualties.”
The number of jobs in the leisure sector for Franklin and surrounding counties dropped by nearly 50% in the spring. In February, it held a total of 104,300 jobs, but by April that number had fallen to 55,700.
As the year ends, the leisure sector remains down by about 25,000 jobs.
Ohio’s overall unemployment rate has improved since the spring. It dropped to 5.7% in November, from 6.1% in October, after peaking at 17.6% in April after Gov. Mike DeWine instituted a statewide lockdown.
“Leisure and hospitality which is a larger sector that includes not only restaurants, but also hotels, arts and recreation, has really, really taken the economy hard,” Lafayette says. “It’s 10% of our economy, but it accounts for about a third of our net loss, and it has a long, long way to come back. It’s still down about a quarter.”
Lafayette stresses that the loss of local businesses can amplify an economic downturn.
“Locally-owned businesses trap two to four times the number of sales dollars that, say, national chains trap,” says Lafayette. “Those dollars that are trapped recirculate around our economy and they wind up creating additional jobs, wealth and income.”
Lafayette says the tariffs imposed by President Trump on China continue to hurt Ohio farmers. He’s not sure what President-elect Joe Biden plans to do with tariffs after he's inaugurated in January.
“It’s not been helpful," Lafayette says. “Farms and exporters of Ohio-made goods, Ohio-grown goods have suffered. And that’s part of why the economy in Ohio has not done as well as the national average.”
Lafayette supports the U.S. government working with China and other allies for multilateral trading benefits.
As more COVID-19 vaccine doses get distributed throughout the state and country, though, Lafayette is more optimistic that economic growth will rebound in the next year. But he says it will take some time.
“It’s going to be probably the end of the year, according to a lot of economists, before we return to where we were last February,” Lafayette says.