Business

Report: COVID-19 could lead to $61B economic loss, cost Long Islanders 375K jobs

A new report released Thursday shows the devastating impacts COVID-19 has had on the Long Island economy.

The report, prepared by Manhattan-based economic development consultant group HR & A Advisors, shows that 270,000 jobs were lost on Long Island during the height of the pandemic in March and April, and at a much faster rate than New York City and other suburban counties throughout the state. The consultants predict that job losses could total 375,000 by the end of the year, which could translate into a loss of $61 billion in local economic activity.

“We have been hammered,” said Suffolk County Executive Steve Bellone at a joint press conference with Nassau County Executive Laura Curran at the Hilton hotel in Huntington Thursday. “COVID-19 has turned the Long Island economy upside down.”

The economic impacts were swift, which County Executive Curran likened to “falling off a cliff.” She said the report outlines stark realities that the counties must jointly address. “It shows what we knew, but quantifies it,” she said.

According to the report, the hospitality industry was the hardest hit, with 82,000 jobs lost. The second-highest sector impacted is the healthcare industry, which may come as a surprise as 59,000 aides as well as technicians and nurses lost jobs. “While we were focusing on the pandemic, a lot of other care was not being provided,” Ms. Curran said.

Retail professions were the third hardest hit, with an estimated 52,000 jobs lost. Approximately 37,000 construction jobs were also impacted by the pandemic.

According to the report, lower-income workers without college degrees as well as minority communities were most affected since they make up a large share of those hard-hit industries. “It’s the workers who were already hanging on,” Ms. Curran said.

Minority communities were also ravaged by the coronavirus, prompting both counties to set up “hotspot” testing sites in those locations.

The report also suggests that economic recovery will occur in waves, starting first with recovering 95% of jobs in the finance, professional and government industries.

It estimates that hospitality businesses, transportation and arts, entertainment and recreation industries will face the longest recovery period of up to two years.

Retail, real estate, construction, education and other services face a 12-month recovery period. 

All recovery efforts will need to be supported by additional resources, including federal funding and other means of budgetary relief for local governments, according to the consultants’ report.

HR&A estimates a $325 million reduction in revenues for Suffolk County, where officials are bracing for a budget gap of over $800 million.

Depending on what happens this fall, Mr. Bellone said that figure could soar to $1.5 billion over 15 months. Though county budget officials have suggested offsetting the deficit by layoffs, a lag payroll and increases to sales tax and other revenue streams, Mr. Bellone said all of those decisions would only generate around $150 million.

He had just three words in response to what’s needed to recover: federal disaster assistance.

“This burden should not be placed on the shoulders of local taxpayers, essential employees and first responders,” Mr. Bellone said, calling for federal lawmakers to act. 

The proposed Heroes Act would provide payments and assistance to municipalities and could also further extend unemployment benefits and provide a second stimulus check to working Americans.

It passed in Congress and the Senate is expected to begin working on the second stimulus package when it returns to work later this month.

“Our region deserves the ability and the opportunity to recover from this unprecedented natural disaster over the next couple of years,” Mr. Bellone said. “This should not be stretched out over the next decade, but that is what will happen,” without federal assistance, he said.

The full report can be viewed at nassaucountyny.gov/EconomicImpact.