Charts of the Week: Jobs, rent, and businesses during coronavirus

As the economic impact of the spreading coronavirus crisis continues to unfold, how will workers, businesses, and renters cope? Here are a few items from recent research and analysis from Brookings experts on COVID-19.

How long will temporary layoffs remain temporary?

Ryan Nunn and Jana Parsons examine how the number of both temporary and permanent layoffs “will increase dramatically in the coming months as the fallout of the COVID-19 crisis begins to appear in the data.” Estimates show that more than 40 percent of all those who transition from employment to unemployment ultimately end up returning to their previous employer. However, in this new context, Nunn and Parsons conclude that today’s layoffs may become permanent. “The economic policy response to COVID-19,” they argue, “should be intended to maximize the share of workers who return to their previous employer.”

Will middle-class households be able to pay the rent?

Jenny Schuetz writes that during this pandemic crisis “one of the most pressing concerns” millions of Americans have apart from staying healthy is whether they will be able to pay the rent. In 14% of the largest metros, a typical renter household would need to spend more than 30% of income to rent the typical home, she notes, and the share of income varies across metros. Schuetz concludes that “as unemployment spikes and incomes plummet during the coronavirus pandemic, households across the country will struggle to pay for housing, groceries, and other basic necessities.”

HOW MIGHT small businessES FARE DURING COVID-19?

Sifan Liu and Joseph Parilla observe that small business, particularly newer ones, were hit hardest during the 2007-09 recession. As the economy continues to suffer impacts from coronavirus-induced measures, they look back at what happened to such businesses then. In 16 of the largest metro areas, they find, small businesses were responsible for more than 90% of the net job loss. Liu and Parilla conclude that “this crisis will demand a set of policy supports that are both broader and longer-term than those pursued in 2009. Otherwise, small businesses are certain to face a calamity.”