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Comparing the experiences of essential and nonessential businesses during COVID-19

March 03, 2021

We use a list of pandemic-essential industries from the Centers for Disease Control and Prevention to classify essential businesses during the COVID-19 pandemic. Among essential businesses, 16.5 percent were subject to government-mandated closures from July through September 2020. That compares with 31.5 percent of nonessential businesses.

A smaller percentage of essential businesses reported decreased demand during the pandemic, and a larger percentage reported increased demand, compared with nonessential businesses.

 Percent of businesses that reported changes due to the COVID-19 pandemic, by industry category
Survey response All essential businesses Nonessential businesses

Decrease in demand

55.2% 60.8%

Shortage of inputs

39.2 26.0

Government closure

16.5 31.5

Difficulty shipping

11.6 10.9

Increase in demand

13.9 9.7

Other

8.3 8.0

None

17.6 15.5

Essential businesses were more likely to report difficulty acquiring supplies. A shortage of inputs affected 39.2 percent of essential businesses, compared with 26.0 percent of nonessential businesses.

Difficulty shipping affected 11.6 percent of essential businesses and 10.9 percent of nonessential businesses.

 Percent of businesses that reported changes in employment and hiring due to the COVID-19 pandemic, by industry category
Survey response All essential businesses Nonessential businesses

Hired additional employees

6.9% 4.4%

Increased hours

5.6 2.9

Increased salaries

6.5 2.9

Told employees not to work

25.8 34.5

Reduced hours

30.6 29.8

Reduced salaries

9.5 15.2

Don't know

2.4 2.6

Other

9.7 9.0

None

39.3 35.4

Essential businesses were more likely than nonessential businesses to increase hiring and pay. Among essential businesses, 6.9 percent hired more employees, 5.6 percent increased hours, and 6.5 percent raised salaries.

Essential businesses were less likely than nonessential businesses to reduce employment and pay; 25.8 percent of essential businesses told employees not to work, with or without pay, compared with 34.5 percent of nonessential businesses.

These data are from the Business Response Survey, which collected information on businesses’ responses to the COVID-19 pandemic from July through September 2020.

SUGGESTED CITATION

Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, Comparing the experiences of essential and nonessential businesses during COVID-19 at https://www.bls.gov/opub/ted/2021/comparing-the-experiences-of-essential-and-nonessential-businesses-during-covid-19.htm (visited December 05, 2021).

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