When it comes to job losses, Atlantic City and Atlantic County have taken the hardest hit in New Jersey, and among the worst in the nation.
Fueled by the closure of casinos and other non-essential businesses in mid-March, the situation is near catastrophic.
Another 141,420 New Jerseyans applied for unemployment in the week ending April 11, based on data from the state Department of Labor and Workforce Development. A total of 429,388 people statewide are now receiving benefits, collecting an all-time record of $140.7 million per week. The amount of benefits paid before March 14 was about $46 million a week. Last year at this time approximately 80,000 state residents received unemployment benefits.
In the U.S., the five-week total of 26 million applications for benefits marks the worst stretch of joblessness on record. More than 718,000 people in New Jersey filed unemployment claims due to layoffs or furloughs from the start of the coronavirus pandemic shutdown through April 11. Atlantic County residents accounted for 9,233 applications, bringing the number in the county to 35,213 from March 15—a day before the casino shutdown—and April 11.
Here’s another startling statistic: the county has 3 percent of the state’s population, but 6.1 percent of its unemployment claims.
The reason for the high numbers is simple. “Thirty-four percent of all jobs in Atlantic County are in at-risk industries,” said economic consultant Rich Perniciaro, citing a Brookings Institute study. These at-risk jobs include casino, tourism and accommodations positions.
The Brookings study said the metro area from Atlantic City to Hammonton ranked as the nation’s third most at risk for job loss due to Covid-19, behind Midland, Texas and Kahului, Hawaii. Las Vegas was fourth.
The casino closures alone put close to 30,000 employees out of work, Michael Busler, professor of finance, and finance program coordinator at Stockton University, told GGB News.
“Although they will collect unemployment compensation and the federal government generously added $600 per week to the payment, the impacts are still great,” Busler said. The added money continues to the end of July.
“Small businesses that service the employees will also lose. That means they will have to lay off people,” he said.
Some businesses may not survive, Busler said. And not just small ones, but perhaps larger chains at the malls. Macy’s, Penney’s, and others face an uncertain future, maybe bankruptcy. The upcoming summer season at the Jersey Shore also faces calamity, depending on when retailers can re-open and under what conditions.
“My view is that the casinos and the resort businesses must be able to re-open prior to Memorial Day,” Busler said.
Governor Phil Murphy has estimated reopening state businesses by June 1. That may be the right date for Northern New Jersey which, along with New York City, represents the epicenter of the pandemic in the U.S., Busler said. Atlantic and Cape May counties have seen less than 500 total cases and about two dozen deaths from the virus. “The risk is lower here, so I think it is reasonable to start to re-open the shore around May 15, so the casinos and other businesses are ready for Memorial Day.”
If the timetable holds, the negative impact for the summer can be minimized, Busler said. “That also depends on any further restrictions placed after opening.”
Will masks be required to enter a casino, or gloves or social distancing? “I think a likely, although maybe somewhat optimistic outcome is that the casinos and the rest of the shore open fully on Memorial Day with some restrictions which will ease as time progresses.”
By the Fourth of July weekend, all restrictions can be eased and result in a somewhat normal summer season, Busler said. “But if the shore is not fully opened by July 4, the economic consequences will be devastating.”
The coronavirus’ impact on the South Jersey economy could be more than $5 billion, and the regional recovery may take even longer than the 2008-09 recession, depending on how long the shutdown and how soon business returns to normal.
According to the most recent South Jersey Economic Review produced by the William J. Hughes Center for Public Policy at Stockton, a 12 percent to 28 percent economic contraction exceeds that during the fiscal crisis more than a decade ago.
“The regional economy’s reliance upon the leisure and hospitality sector again looms large,” said Oliver Cooke, associate professor of economics at Stockton. “We play and vacation together. And, personal, intimate, high-quality service (whether provided at a poker or restaurant table) arguably lies at the heart of the hospitality business.”
The length of the economic lockdown and the lasting effects of the coronavirus pandemic—a distaste for restaurants, casinos, convention halls, entertainment venues, beaches and shopping districts—will influence just how large of an impact the pandemic has on South Jersey, both immediately and in the near future, according to the Press of Atlantic City.
“While the speed of the return to normalcy will dictate the number of lost summer 2020 shore weeks, my own sense is that the Covid-drag will eventually play the more important role in determining the trajectory of the regional economy,” Cooke said. “While we will eventually begin to work and play again, it strains credulity to believe that we will all do so at the same levels we previously did for what remains of 2020.”
The leisure and hospitality sector makes up 15 percent, or roughly $2.8 billion of the regional economy, while the retail trade sector accounts for nearly $1.4 billion, or 8 percent. The largest portion of the regional economic output is the real estate, rental and leasing industry, which accounts for $4 billion.
“The longer it takes for the economy to re-establish some semblance of normalcy, the shorter the 2020 summer shore season will be and thus the greater the impact on the regional economy’s real estate industry,” Cooke said.
