![](\"https:\/\/static01.nyt.com\/images\/2021\/09\/02\/business\/02econ-shift02\/merlin_193476234_1f20aa0f-ab68-4533-95b7-1b6770e35d64-articleLarge.jpg\")
<\/p>\nRestaurant Associates is not the company it used to be. It has long operated restaurants, catered events and run corporate dining rooms for clients including Google and the Smithsonian Institution. Now it employs about half of the 10,000 or so people it had on staff before the pandemic.<\/p>\n
As its lines of business dried up, the company invented new ones. It has made soups and side dishes for the online grocer FreshDirect. It has delivered meals to displaced Wall Street traders working from Connecticut, and to guests attending \u201cvirtual galas\u201d from home.<\/p>\n
Restaurant Associates is probably going to have to keep improvising. Just as things started looking up in the summer \u2014 with some museums reopening, businesses scheduling a return to the office, and catered galas bouncing back in full force \u2014 the Delta variant of the coronavirus brought everything, again, to a halt.<\/p>\n
\u201cWe were very hopeful that by September we would start coming back strong,\u201d said Dick Cattani, the chief executive. Now, he said, \u201cwe don\u2019t know what\u2019s happening, what\u2019s next.\u201d<\/p>\n
This anxiety is widespread across the American economy. As Kevin Thorpe, chief economist of the commercial real estate services firm Cushman & Wakefield, noted, \u201cThe longer the virus lingers, the more transformative it is going to be.\u201d<\/p>\n
A critical question is whether the urban service economy \u2014 the restaurants, hotels, taxi services and entertainment venues that employ millions of workers \u2014 can recover from the multiple waves of Covid-19 that have kept their customers away.<\/p>\n
After months of social distancing and remote work, this will depend to a large extent on how employers and workers readjust their attitude toward proximity and density \u2014 toward space.<\/p>\n
Three researchers \u2014 Jos\u00e9 Mar\u00eda Barrero of Autonomous Technological Institute of Mexico, Nicholas Bloom of Stanford University and Steven J. Davis of the University of Chicago \u2014 estimate that from April to December 2020, half of the working hours in the American economy were supplied from home. After the pandemic ends, they think, the share will fall to around 20 percent. That is still four times the amount of work delivered remotely in 2017 and 2018.<\/p>\n
And remote work will be concentrated among the most highly paid workers in the most densely populated places. For instance, over half of the workers in high-skill, information-intensive services \u2014 in finance and insurance, information, professional services and management \u2014 were still working from home in January, according to researchers from Princeton, Georgetown, Columbia and the University of California, San Diego.<\/p>\n
Big cities face a dual threat of losing both their most skilled workers and the consumer service economies they sustain, the researchers wrote. \u201cAs a result,\u201d the authors added, \u201cthey may shrink in size unless they manage to provide advantages that justify the costs of urban density when residential choices are set free from proximity-to-workplace considerations.\u201d<\/p>\n
About 18 percent of office space in central business districts across the United States is vacant, compared with 12 percent before the pandemic, according to Cushman & Wakefield. Groupon, Twitter, United Airlines and other businesses are shedding office space. Some are rethinking their use of space entirely.<\/p>\n
<\/p>\n
The sports equipment retailer REI sold the corporate headquarters it was building in the Seattle area, meant to house some 1,800 employees, and is setting up three smaller satellite offices around the area, for workers to gravitate to if they wish. They can work entirely from home, too.<\/p>\n
\u201cWe felt there are moments when being physically together makes a difference but it doesn\u2019t have to be all the time,\u201d said Christine Putur, REI\u2019s executive vice president for technology and operations. \u201cWe want to move forward with more habits, new norms \u2014 let the outcomes drive when and how we get together.\u201d<\/p>\n
This reconfiguration of work is likely to reconfigure the American economy, changing wages and spending patterns.<\/p>\n
Google, for instance, is allowing employees to work remotely. But it will adjust compensation depending on the local cost of living. In a blog post to employees, Google\u2019s chief executive, Sundar Pichai, estimated that some 20 percent of them would choose to work from home permanently. And the company developed a calculator for employees to figure out the effect on their pay.<\/p>\n
Mr. Davis of the University of Chicago and his co-authors estimate that the increase in working from home will reduce spending in city centers by 5 to 10 percent, hurting business at restaurants, bars and other spots that rely on the spending of office workers.<\/p>\n
\u201cSome of the leisure and hospitality activities will follow those people that are no longer in the downtown area,\u201d Mr. Davis said. But the spending of newly suburbanized workers may be different, including fewer lunches and happy hours than when they worked downtown.<\/p>\n
America\u2019s economic geography looks different from what it did two years ago. New York City\u2019s share of the nation\u2019s employment fell to 2.8 percent in July 2021, from 3.1 percent in July 2019. That means about 375,000 fewer jobs than if the city had at least kept pace with the country as a whole.<\/p>\n
![](\"https:\/\/static01.nyt.com\/newsgraphics\/2021\/08\/27\/city-share-jobs\/50792df61310e4c77d76d378c1815abb5140843d\/city-share-jobs-335.png\")
<\/p>\n
Change in each city’s<\/p>\n
share of employment<\/p>\n
Share of total U.S.<\/p>\n
employment in July:<\/p>\n
102<\/p>\n
1.9%<\/p>\n
100<\/p>\n
98<\/p>\n
1.2%<\/p>\n
2.5%<\/p>\n
96<\/p>\n
3.9%<\/p>\n
94<\/p>\n
Index of each city’s share of total U.S. employment, July 2019=100.<\/p>\n
2.8%<\/p>\n
92<\/p>\n
90<\/p>\n
2019<\/p>\n
2020<\/p>\n
2021<\/p>\n
![](\"https:\/\/static01.nyt.com\/newsgraphics\/2021\/08\/27\/city-share-jobs\/50792df61310e4c77d76d378c1815abb5140843d\/city-share-jobs-600.png\")
<\/p>\n
Change in each city’s share of employment<\/p>\n
Share of total U.S.<\/p>\n
employment in July:<\/p>\n
102<\/p>\n
1.9%<\/p>\n
100<\/p>\n
98<\/p>\n
An index of each city’s share of total U.S. employment, July 2019=100.<\/p>\n
1.2%<\/p>\n
2.5%<\/p>\n
96<\/p>\n
3.9%<\/p>\n
94<\/p>\n
2.8%<\/p>\n
92<\/p>\n
90<\/p>\n
2019<\/p>\n
2020<\/p>\n
2021<\/p>\n
Notes: July figures are preliminary. Not seasonally adjusted.<\/p>\n
Source: Bureau of Labor Statistics<\/p>\n
By Karl Russell<\/p>\n
Other places tell a similar story. The Boston metropolitan area\u2019s share of the nation\u2019s jobs dropped abruptly after Covid struck, and has only partly recovered. The same is true of Los Angeles, Chicago, San Francisco and Philadelphia.<\/p>\n
The pattern of employment in and around cities has changed, too. By July, the Atlanta metropolitan area had recovered most of the jobs lost since the same month of 2019. But employment in its food and drink businesses was down more than 10 percent. The leisure and hospitality sector, which also includes entertainment and accommodation, was employing 13 percent fewer people.<\/p>\n
![](\"https:\/\/static01.nyt.com\/newsgraphics\/2021\/08\/27\/jobs-in-cities\/103ee656799b151317445b0666373a3356cea0fd\/city-industries-jobs-335.png\")
<\/p>\n
Industry’s share of employment in each city<\/p>\n
LOS ANGELES<\/p>\n
NEW YORK<\/p>\n
14<\/p>\n
%<\/p>\n
12<\/p>\n
Leisure and<\/p>\n
hospitality<\/p>\n
10<\/p>\n
8<\/p>\n
6<\/p>\n
Food service<\/p>\n
and drinking places<\/p>\n
4<\/p>\n
2<\/p>\n
Accommodation<\/p>\n
0<\/p>\n
’19<\/p>\n
’20<\/p>\n
’21<\/p>\n
’19<\/p>\n
’20<\/p>\n
’21<\/p>\n
CHICAGO<\/p>\n
ATLANTA<\/p>\n
14<\/p>\n
%<\/p>\n
12<\/p>\n
10<\/p>\n
8<\/p>\n
6<\/p>\n
4<\/p>\n
2<\/p>\n
0<\/p>\n
’19<\/p>\n
’20<\/p>\n
’21<\/p>\n
’19<\/p>\n
’20<\/p>\n
’21<\/p>\n
![](\"https:\/\/static01.nyt.com\/newsgraphics\/2021\/08\/27\/jobs-in-cities\/103ee656799b151317445b0666373a3356cea0fd\/city-industries-jobs-600.png\")
<\/p>\n
Industry’s share of employment in each city<\/p>\n
LOS ANGELES<\/p>\n
NEW YORK<\/p>\n
CHICAGO<\/p>\n
14<\/p>\n
%<\/p>\n
12<\/p>\n
Leisure and<\/p>\n
hospitality<\/p>\n
10<\/p>\n
8<\/p>\n
6<\/p>\n
Food service<\/p>\n
and drinking places<\/p>\n
4<\/p>\n
2<\/p>\n
Accommodation<\/p>\n
0<\/p>\n
’19<\/p>\n
’20<\/p>\n
’21<\/p>\n
’19<\/p>\n
’20<\/p>\n
’21<\/p>\n
’19<\/p>\n
’20<\/p>\n
’21<\/p>\n
![](\"https:\/\/static01.nyt.com\/newsgraphics\/2021\/08\/27\/jobs-in-cities\/103ee656799b151317445b0666373a3356cea0fd\/city-industries-jobs-1050.png\")
<\/p>\n
Industry’s share of employment in each city<\/p>\n
LOS ANGELES<\/p>\n
NEW YORK<\/p>\n
CHICAGO<\/p>\n
ATLANTA<\/p>\n
BOSTON<\/p>\n
14<\/p>\n
%<\/p>\n
12<\/p>\n
Leisure and<\/p>\n
hospitality<\/p>\n
10<\/p>\n
8<\/p>\n
6<\/p>\n
Food service<\/p>\n
and drinking places<\/p>\n
4<\/p>\n
2<\/p>\n
Accommodation<\/p>\n
0<\/p>\n
’19<\/p>\n
’20<\/p>\n
’21<\/p>\n
’19<\/p>\n
’20<\/p>\n
’21<\/p>\n
’19<\/p>\n
’20<\/p>\n
’21<\/p>\n
’19<\/p>\n
’20<\/p>\n
’21<\/p>\n
’19<\/p>\n
’20<\/p>\n
’21<\/p>\n
Notes: Food service and drinking places and accommodation are subsets of leisure and hospitality. Plotted monthly through preliminary July figures. Not seasonally adjusted.<\/p>\n
Source: Bureau of Labor Statistics<\/p>\n
By Karl Russell<\/p>\n
Employment in the Phoenix area had actually increased since July 2019. But leisure and accommodation jobs were down by 6 percent. And in New York, Boston and San Francisco, home to some of America\u2019s best-paid workers in technology and finance, employment in leisure and hospitality in July was down by at least a fifth compared with two years earlier.<\/p>\n
Some jobs have returned. Barbara Xocoyotl, furloughed when the Omni hotel in New Haven, Conn., was shuttered for months last year, is again cleaning rooms. So is Maria Valdez at the Grand Hyatt in San Antonio, though she says she has fewer co-workers.<\/p>\n
And new opportunities have arisen. Notably, even as the country lost 256,000 retail jobs from July 2019 to July 2021, warehousing and transportation added 209,000 positions, as Amazon and other providers set up distribution centers to keep up with the increase in online ordering.<\/p>\n
Warehouse work is generally outside the urban core, though. Employment in the downtown service economy \u2014 which depends on the spending of office workers, business travelers and tourists \u2014 has yet to recover from Covid\u2019s blow.<\/p>\n
Rob Siminoski is back running shows at Universal Studios, a short drive from downtown Los Angeles, but his schedule is uncertain. \u201cTechnically I\u2019m back to work, but this week I had two days; a couple of weeks ago I had zero days,\u201d he said. He says he has so few hours that he continues to qualify for unemployment benefits.<\/p>\n
The Jacobs Theater in Manhattan hasn\u2019t reopened yet. So Zoraida Rodriguez hasn\u2019t returned to her cleaning job (she is working a three-month gig at her union, Local 32BJ of the Service Employees International Union). Neither has Kristinia Bellamy, who cleaned an office building in Midtown Manhattan until it was closed last year.<\/p>\n
Altogether, some 3,000 of 21,000 office cleaners in 32BJ are on recall lists, waiting for their buildings to reopen, said Denis Johnston, who heads the local\u2019s commercial building division.<\/p>\n
That\u2019s down from 7,000 in the spring of 2020. But as companies start delaying their plans to return to the office, progress has halted. \u201cSix weeks ago we had so much momentum,\u201d Mr. Johnston said. \u201cFor our members out of work, the idea that reopening is not going to happen until next year \u2026 it\u2019s ugh.\u201d<\/p>\n
Could this all eventually snap back to the way things were before the pandemic? Enrico Moretti, an economist at the University of California, Berkeley, suggests that remote work will be reined in by employers who fear workers\u2019 productivity will suffer.<\/p>\n
Job offers allowing fully remote work jumped from about 2 percent of openings to 6 to 7 percent after the pandemic hit, he noted. But they have maintained that share since then. \u201cIt remains a niche phenomenon,\u201d he argued.<\/p>\n
He doesn\u2019t expect that to grow much further. Employers may allow working from home a couple of days a week, he said, but Zoom is not a permanent replacement for the kind of interaction and collaboration on which innovation thrives.<\/p>\n
Juggling desperately as his customers keep pushing back their plans to return to the office, Mr. Cattani at Restaurant Associates hopes Mr. Moretti is right.<\/p>\n
Mr. Cattani (whose company runs the cafeteria in The New York Times Building) ticks off reasons that his customers will return: Workers won\u2019t want to take a pay cut to work remotely; more will get vaccinated; they are \u201cZoomed out\u201d; there is huge pent-up demand for the social activities that Covid took away.<\/p>\n
Still, he acknowledges, \u201cthe crystal ball is very cloudy.\u201d<\/p>\n