Initial Impacts of the COVID-19 Recession on Employment & Establishments
The arrival of the virus that causes COVID-19 in Minnesota in early 2020 and subsequent steps to slow its spread sparked immediate and severe widespread economic damage. Although several aggregate statistics describe the magnitude of this damage, many details on the impact on businesses and industries have been missing from the picture.
Mustapha Hammida from DEED's Labor Market Information Office provides an in-depth look at the immediate impact of COVID-19 on Minnesota businesses by analyzing data from the Quarterly Census of Employment and Wages (QCEW) program. It compares the net job loss during the COVID-19 recession to the previous two recessions, quantifies the impact of COVID-19 on businesses during March and April 2020, and evaluates the initial extent and duration of business closures due to COVID-19.
Hammida also extended the analysis of monthly business employment dynamics utilized in the first article of this series to investigate how the COVID-19 recession impacted Minnesota firms of different size classes during March and April 2020. During that time frame, 410,736 jobs were lost and 10,492 businesses were closed. The number of job-creating businesses shrunk while the number of job-destroying businesses skyrocketed, with significant differences in levels and rates across industries, and this study shows, by firm size class. Five size classes are considered: very small: 1 to 4 employees, small: 5 to 9 employees, medium: 10 to 49 employees, large: 50 to 249 employees, and very large: 250 or more employees.