CSU Study: Cleveland Ranks 4th In U.S. Pandemic Job Losses

A report from Cleveland State University finds the city ranks fourth among the nation’s 40 largest metro areas for jobs lost during the COVID-19 pandemic.

Cleveland-area jobs declined by 12 percent from July 2019 to July 2020, the fourth-worst decrease among cities included in the study, behind only New York City, Boston and Las Vegas.

Every sector has felt the impact of the pandemic, said Richey Piiparinen, director of urban theory and analytics at CSU’s Maxine Goodman Levin College of Urban Affairs. But hospitality and healthcare, which make up a large portion of Cleveland’s economy, were hardest hit.

“Healthcare’s been a super-big industry in Cleveland,” Piiparinen said. “But because of elective surgeries and people not going to the doctor’s, those have been really big drop-offs.”

Cleveland’s job growth was starting to flatten out prior to the pandemic, Piiparinen said, as early as August 2019, hinting at the start of a predicted recession.

“There’s only so much healthcare jobs you can grow,” he said, “even in a place like Cleveland that is exporting healthcare as a service through the likes of the Cleveland Clinic.”

There also isn’t much innovation or research to spur further growth in the area, Piiparinen said.

COVID-19’s impact has come in waves, Piiparinen said, forcing the economy to start and stop throughout 2020 and leading to further negative economic impact in the region, he said.

“It’s the stop and start of this economic engine, with the fear of the contagion, that is exceedingly unprecedented,” Piiparinen said.

Cleveland’s pandemic-related job losses came in at about 130,000 in July, he said, which is about equal with June’s number and down by about 50,000 from the peak in April. But the losses are more than double what was seen during the Great Recession, Piiparinen said.

Previous recessions have resulted in a “jobless recovery” for Northeast Ohio, Piiparinen said, where many jobs are replaced with automation to increase economic output while cutting costs. That’s a concern as the region looks into ways to recover, he said.

“When you can’t have people in, like, meat packing plants, they’re not just going to not do the job. They’re going to want to automate it,” Piiparinen said. “They’re going to want to bring in more robots because, quite frankly, as one firm owner said, robots can’t get COVID.”

The pandemic has hit Northeast Ohio’s economy particularly hard, said Team NEO Vice President of Strategy and Research Jacob Duritsky, keeping with an unfortunate trend for the region, where the 2008 Great Recession and economic downturns generally have an outsized impact.

“We’ve been hit disproportionately hard, and unfortunately at this time I would say all sectors are feeling it,” Duritsky said. “It looks like without intervention, and that’s always, I think, the key, what can we do to change that trajectory?”

Northeast Ohio’s economy had begun to stagnate prior to the pandemic, Duritsky said, due to population decline, inequity across communities and talent gaps in major industries such as healthcare, manufacturing and information technology.

Team NEO is projecting about an 8 percent loss in jobs for the region over the course of 2020, he said.

But the area can benefit from the fact that many other major markets, such as Boston and New York, are experiencing similar issues with job loss, Duritsky said.

“The fundamentals of what make us a good market aren’t going to go away overnight, right?” Duritsky said. “The interesting thing about a pandemic that none of us have ever experienced is we’re all sort of in this together.”

Intervention could come through policy measures such as financing personal protective equipment and reevaluating supply chains to determine what can be localized, Duritsky said. And the increased prevalence of remote work could provide opportunities for the region, he said, as people come to learn they can do the same work from the Midwest, with a lower cost of living and similar quality of life compared to either coast.

“Long-term, we influence this trajectory,” he said. “How we sort of bend that curve and how we recover is up to us.”