Restaurant Industry Added 1.5 Million Jobs in June

    Food and drink sector is still missing more than 3 million workers.

    Barista prepares a coffee.
    Unsplash/quan le
    The BLS said the unemployment rate dropped to 11.1 percent in June.

    Approximately 4.8 million jobs were added in June, including 1.5 million in the food and drink industry, according to the Bureau of Labor Statistics (BLS).

    The restaurant industry saw a similar increase in May, meaning about 3 million jobs have been added in the past couple of months. More than 9.1 million were on payroll in June, up from 6.2 million in April.

    The BLS said the unemployment rate dropped to 11.1 percent in June, down from 13.3 percent in May. The number of unemployed citizens decreased by 3.2 million to 17.8 million. The figures have greatly improved from April when 20.7 million jobs were cut and the unemployment rate was 14.7 percent. In April and March, the restaurant industry lost 6.1 million jobs.

    “These improvements in the labor market reflected the continued resumption of economic activity that had been curtailed in March and April due to the coronavirus [COVID-19] pandemic and efforts to contain it,” the BLS said in a statement.

    The monthly unemployment rate requires context. The BLS has noted in the past few months that data has misclassified workers who should have been counted as unemployed or temporarily laid off. If that error didn’t exist, the unemployment for June would have been about 1 percentage point higher. However, the BLS clarified that the “degree of misclassification declined considerably in June” and that the roughly 1 percent point increase “represents the upper bound of our estimate of misclassification and probably overstates the size of the misclassification error.”

    The restaurant industry is still a long way from recovery. Overall employment is still down 3.1 million from what it was in February.

    Additionally, the BLS data comes from mid-June, so it doesn’t take into account the effect of the growing number of COVID cases across the country. Many states have rolled back reopening plans. California closed dining rooms in more than a dozen counties for at least three weeks, New York delayed the return of in-restaurant dining, and Texas closed bars and reduced capacity limits in restaurants from 75 percent to 50 percent.

    The NYC Hospitality Alliance released a survey this week showing that 80 percent of operators aren’t paying full rent, which indicates that restaurants are still in deep financial stress.

    “Restaurants and bars have been making enormous financial sacrifices for four months, and their survival now depends on compensation reflective of those losses,” said NYC Hospitality Alliance Director Andrew Rigie in a statement. “We respect the government and public health officials’ decision to postpone the anticipated July 6th reopening of indoor dining, but the longer neighborhood restaurants and bars are forced to be closed, the harder it will be for them to ever successfully reopen. This makes it even more urgent to forgive rent, expand outdoor dining and enact other responsive policies to save our city’s beloved small businesses and jobs.”

    Meanwhile, the U.S. Department of Labor reported 1.4 million people filed initial unemployment claims in the week ending June 27, a decrease of just 55,000 from the prior week. Weekly initial unemployment claims have been over one million since March. Around 45 million have filed claims in that timeframe.