The coronavirus pandemic is affecting every corner of the U.S., but a new analysis from the Brookings Institution highlights the American cities that are likely to get hit the hardest by a coronavirus recession. These cities share a theme: They are among the country’s major energy, tourism and amusement destinations.
Even though New York City and Seattle are hotspots for coronavirus outbreaks, they may not be the worst hit when it comes to the number of jobs that could be lost as businesses cut back. In fact, the city that could face the largest share of job losses could be Midland, Texas, an oil boom town with 42% of its jobs located in high-risk industries, Brookings said.
Initial job losses have stemmed from restaurants and stores that have been forced to shut their doors amid “shelter-in-place” orders from local governments, as well as more consumers opting to stay at home. Yet the oil industry is also facing a massive crisis, due to both a sharp decline in demand amid travel cutbacks as well as a price war between Saudi Arabia and Russia.
The drop in demand for oil has been severe and swift, with oil prices down by two-thirds since year-start, according to Mark Finley, fellow in energy and global oil at Rice University’s Baker Institute. Demand has declined by 10%, he noted, adding that the only previous period when oil demand declined by that amount was from 1979 to 1982, when the U.S. was in a recession and still coping with the 1970s oil crisis.
“What that took those extraordinary circumstances to do in three years, we’ve done in three months,” Finley noted on a Monday conference call about the economic Impacts of COVID-19 that was hosted by the National Association for Business Economists.
To examine the cities most likely to be hardest hit by job losses, Brookings experts Mark Muro, Jacob Whiton and Robert Maxim said they based their analysis on Moody’s chief economist Mark Zandi’s report on the “most at risk” industry groups. These industries are:
Next, they mapped those industries as a share of the local economy for each of the country’s top metropolitan areas. Overall, the U.S. has more than 24 million workers in these five industries, Brookings noted.
“The most affected places are a who’s who of energy towns and major resort, leisure and amusement destinations across the nation,” the Brookings researchers wrote in a blog post about their findings.
If there’s a silver lining, it’s that some cities could weather the coronavirus recession better than others — including many already-battered Rust Belt cities, as well as agricultural communities, they added. Tech-focused university towns like Provo, Utah, and San Jose, California, may also be more insulated. Even so, it’s unlikely that any city will emerge unscathed from a recession, they added.
Below are the top 15 cities facing economic disruption, ranked by their share of jobs in the most at-risk industries: