One year in, the pandemic has taken an uneven economic toll across the region

Sharon Carter lost her sales job at Macy’s in Hicksville last March, when the COVID-19 pandemic forced brick-and-mortar stores to close. In a one-two punch, she also lost her part-time work as a home health aide, as clients became too scared to let people into their homes.

A year later, she has been unable to find a new job.

"It’s aggravating," said Carter, 44, who had worked at Macy’s for 14 years and lives with her parents in West Babylon. "I’ve always been working. … I’m not used to having all this time on my hands."

The pandemic hit Long Island’s economy with the force and randomness of a tornado, causing devastation for some and leaving others unscathed. Like Carter, many Long Islanders are still suffering stalled careers and financial hardships, especially those employed in low-wage industries.

The total number of jobs on the Island was down 8.9% in January compared with a year earlier, the state Department of Labor reported. The impact varied widely by sector — and some segments of the economy actually gained jobs, state figures show. The hardest-hit major sector, tourism, saw jobs plummet year-over-year by 27%. The retail industry mirrored the overall 8.9% annual decline in jobs. However, employment plunged by nearly 29% at clothing shops even as jobs jumped by 7% at home and garden stores. The overall number of health care jobs fell by 5.3%, but hospitals saw a 1.1% gain in employment.

People who work in the service sector, including retail, hospitality and low-wage health care employees, "have been hurt the worst" by the pandemic, said John A. Rizzo, chief economist for the Long Island Association business group and a Stony Brook University professor. "Those jobs are disproportionately low income … [and] women and minorities have been disproportionately hurt."

By contrast, many white-collar professionals who can work remotely "are doing just fine," Rizzo said.

Despite the financial setbacks she has faced during the pandemic, Carter is determined to recover; she expects to start classes next month to become certified as a nursing assistant, which she hopes will springboard her into a new career with better prospects.

"Maybe this worked out for the best," she said.

It’s likely that Long Islanders who have lost jobs and earnings due to the pandemic will see their fortunes improve this year, economists said.

Rizzo predicted the April-June period will be a time of "uncertainty." But as vaccinations and the reopening of the economy continue, the second half of the year will likely bring "a substantial spike in economic growth … just in time for the summer tourism season, which is vitally important to Long Island’s economy," Rizzo said. "We will return to normal sometime in 2022."

Consumer confidence in the metropolitan area experienced a "panic drop" of pessimism when the coronavirus struck in March 2020, but there has been a partial rebound since then, said Doug Lonnstrom, who oversees the Siena College Research Institute’s Index of Consumer Sentiment.

If the nation avoids another COVID-19 surge and consumer confidence keeps climbing, Lonnstrom said, "We could see something like what happened after World War II. … Everybody had money after the war, and they spent it. That’s why the 1950s were such a great decade."

Some Long Islanders already are benefiting from locals’ desire to put the pandemic behind them.

Holbrook resident Richard McGuire loved his job as a food and beverage operations manager at the Long Island Marriott in Uniondale. But when he was furloughed twice last year, he realized it was time to pivot.

First, he helped two friends plan their wedding. "From there on out, it snowballed into more calls, more events and just like that, ‘boom,’ Five Star Bartending & Events was born," he said.

McGuire has planned numerous "Covid cautious" events, including backyard weddings and birthdays, as well as online bartending and cocktail-making classes. Through word-of-mouth and by passing out business cards at in-person gigs, he amassed a roster of clients that "is growing by the day," he said; his virtual clients include St. John’s University, several Long Island medical groups, and a local vineyard.

The virtual parties range from $250 to $450.

"It’s been such a wild, unpredictable ride," McGuire said. "But I’m a business owner now so cheers to that."

Some local businesses that help people facing financial distress also have gotten a boost. West Babylon resident Elissa Costanza, 30, said her business, She Does Credit LLC, which provides credit restoration counseling, nearly tripled as people sought to get their finances in order last year.

In mid-January, Costanza debuted a "She Does Credit" show on Comcast cable and Roku, airing in New York and in several nearby states.

"We've already filmed and aired a couple episodes," she said. "So, I'm feeling excited and positive."

Here is a sector-by-sector look at the pandemic's impact.

EMPLOYMENT

While Long Islanders from many walks of life have faced economic hardship and job loss because of the pandemic, some sectors have been harder hit than others.

Leisure and hospitality, a sector that includes hotels, bars and restaurants and amusement businesses, lost 32,600 jobs in 2020, more than any other sector, said Shital Patel, labor market analyst in the state Labor Department’s Hicksville office.

That amounts to roughly one in four jobs, Patel said.

Overall, the Island lost about 140,000 jobs — about one in 10. The Island's jobless rate was 8.5% for 2020 as a whole, though it dropped to 6.4% in January, state figures show.

While the economic picture for restaurant and bar workers is certainly bleaker than for other workers on the Island, no sector came out a major winner in terms of job creation last year, Patel said.

The job losses in leisure and hospitality were caused by COVID, and the sector is likely to make a gradual recovery, said Rizzo, of the Long Island Association. Manufacturing, financial services and tech have "fared far better than service industries that involve people contact," he said.

Brick-and-mortar retail, however, was facing a "long-running decline" due to online competition, and that won't end just because the pandemic does, Rizzo said. "What happened in leisure and hospitality was purely COVID," he said. "What is happening in retail was happening before COVID."

Jobs in the Island's construction industry were down 8.5% in January compared with a year ago, state Department of Labor figures show.

Retail and office-building construction has slowed but the strong demand for multifamily rental buildings and single-family homes has kept many builders busy, said Mitchell Pally, CEO of the Long Island Builders Institute, a trade group in Islandia. Pally said he expects the construction industry to rebound, since several Long Island megaprojects — including Station Square, formerly known as the Ronkonkoma Hub, which is expected to eventually grow to 1,450 residential units along with extensive retail, office and hospitality space — are set to move ahead this year, and federal funds will allow the MTA to resume its $51.5 billion capital program.

"I would say construction employment would start to go up as more of these projects start to move forward," Pally said.

HEALTH CARE

Unlike many industries on Long Island, health care didn't grind to a halt as COVID-19 gripped the region last March. It went into overdrive.

Hospitals were filled beyond regular capacity, and medical professionals in ambulatory settings were routinely moved to hospitals to help with COVID-19 care.

But the focus on COVID, and people's fear of the virus, led many to stop seeking routine care. Visits to Northwell doctors' offices dropped from an average of 17,000 per day to about 1,000, said Joseph Lamantia, senior vice president of ambulatory services for the eastern region at Northwell Health, the largest health system in the state.

"It's as if the floor dropped," he said.

Northwell, like other health systems, including Catholic Health, turned to telehealth visits to close the gap.

Lamantia said Northwell quickly ramped up from about 100 visits daily to between 5,000 and 7,000 daily.

While telehealth helped keep patients connected, that trend has faded in 2021, he said.

"Doctors want to see their patients, whenever possible, and patients want to see their doctors," Lamantia said. "But we are still performing about 1,200 telehealth visits per day. It's another way for us to connect with patients."

Regular visits are now at between 19,000 and 20,000 per day, as patients return after avoiding medical facilities last year.

Meanwhile, surgeries, which generate revenue at health systems, also dropped considerably in 2020.

"That's also returned," Lamantia said. "We've been playing catch-up."

RETAIL

The brick-and-mortar retail industry, particularly department stores and shopping malls, was already taking a beating before the pandemic, as stores struggled to compete with online and big-box retailers.

The pandemic exacerbated those woes.

In the fourth quarter of 2020, the retail vacancy rate for Long Island shopping centers between 10,000 and 350,000 square feet hit 9.7%, the highest since at least 2000, said Keegan Kelly, associate economist at Moody’s Analytics Reis, a Manhattan real estate information company.

The clothing and accessories category was hit especially hard, since those stores were state-mandated to be closed for months last year, said Patel, of the Department of Labor.

Long Island’s employment in the clothing and accessories category was down 28.7% in January, compared with a year earlier, according to department data. Over the same period, overall retail jobs fell by 8.9%, to 140,900 jobs.

Big-box stores, discount grocers and off-price department stores will make more of a play for vacant space this year, said retail expert Burt Flickinger III, who founded the Manhattan-based Strategic Resource Group.

And as landlords work harder to fill empty spaces, Flickinger said, retailers "will be able to get the lowest rents in 25 years."

At the same time, the warehouse industry is benefiting from the explosion of online shopping.

Amazon plans to add at least five warehouses to the three it already operates to make "last-mile" deliveries to consumers. Home Depot will have a warehouse in Hicksville and Stop & Stop recently added a sixth "wareroom" at its supermarket in Hempstead Village.

Together, the new and proposed warehouses will cover about 1.5 million square feet and employ more than 4,300 people, including delivery personnel.

More than 43,000 people worked in warehousing and transportation in Nassau and Suffolk counties as of January compared with 45,000 a year earlier, according to the Labor Department.

REAL ESTATE

Long Island home prices have skyrocketed over the past year, rising annually by 18% to a median of $475,000 in Suffolk County and by 14% to a median of $600,000 in Nassau County last month, a recent report by the OneKey MLS shows.

The strong housing market helped avert a more damaging downturn, said Jim Speer, CEO of the OneKey multiple listing service. Economists say home sales spur spending in the real estate and construction industries and on items such as furniture.

But at the same time, many hard-hit Long Islanders have fallen behind on mortgage payments and rent, said Peter Elkowitz, CEO of the Long Island Housing Partnership in Hauppauge. When the state’s moratorium on evictions and residential foreclosures ends — it’s now scheduled to be lifted May 1 — "that's when you’ll see a real major hit on people who have suffered and been affected by the pandemic," Elkowitz said.

In the metro area, a census survey showed nearly 46% of those earning between $35,000 and $49,999 had fallen behind on rent payments. More than 14% of those earning $50,000 to $100,000 had missed rental payments, the Census Bureau reported in its Household Pulse Survey for late February. The rate of default dropped to single digits for higher earners, with 4.1% of those making at least $200,000 annually indicating they were behind.

Demand has slipped in the office market, though. The amount of workspace available for lease has grown 15% and the square footage available for sublet has increased 84% compared with last year, according to CoStar, an international commercial real estate analytics company.

"On the health care side, life is good," Cristofer Damianos, principal of Damianos Realty Group, said of hospitals and private practices. "It’s just on the corporate side that we’ve got to really keep our eyes peeled."

Office owners say they’re unsure how the growth of telecommuting may influence demand post-COVID-19. Many firms will take less space to save money. In some cases, firms might seek more square feet per person.

Some New York City companies have issued requests for proposals, indicating they’re considering opening satellite offices on the Island, according to Michael Maturo, managing partner and president of RXR Realty LLC, which owns 5 million to 6 million square feet of office space on the Island.

Long Island could end up "on the right side" of a movement toward locating workplaces closer to suburban homes, Maturo said.

TOURISM

It's no secret that travel restrictions and mandated closures to slow the spread of the virus rocked the country's tourism and hospitality industry. In New York, scores of businesses in the sector laid off thousands of workers as travel of all kinds plummeted.

On the Island, the COVID crisis affected tourism and hospitality businesses differently depending on where they were located, said Kristen Jarnagin, president and CEO of Discover Long Island, the Island's official tourism promotion agency.

"Hotels on the East End, for instance ... a lot of them fared really well because they saw an increase in visitors coming from Manhattan, mostly people seeking an escape, wanting to enjoy our open spaces," she said.

"These were hotels that usually close after Labor Day but because of the high demand, many stayed open much longer. At the same time, hotels that heavily relied on stays from business travelers were devastated."

With the warmer months upon us and an easing of travel restrictions, Jarnagin said, industry insiders are feeling "a lot of pent up excitement."

"The tourism and hospitality industry was one of the first to suffer," she said. "Now, we're hoping that as people start feeling more confident and feeling that it's safer to travel, we'll also be one of the first to bounce back."