It's a K-Shaped Recovery: Some Are Getting Back to Normal While Others Being Left Behind

those typed to tourism and public gatherings have suffered. Tao Francis business reporter at the Wall Street Journal who joins us for the K shaped recovery. Thanks for joining us, Teo, good to be here. I wanted to talk about the economic recovery of the country right now as we continue to go through the pandemic. A lot of people were hoping for some type of V shaped recovery, you shaped recovery.

That's when you know it obviously drops down very sharply but recovers very quickly, or in the case of a U, it kind of takes a little longer to come back, but it comes back still nonetheless. But what we're seeing out there is a little bit more of a K shaped recovery, so really a kind of a divide between people. People on an upper arm are recovering much more quickly and and getting back to normal levels of people on

the lower arm are not so. TEO, tell us a little bit about how the country is recovering so far economically. I mean, if you look at the overall numbers, were clearly coming back from a deep round of economic crisis. But for some people that recovery is almost done. You have essentially white collar workers, people who can do their jobs from home. You have companies that either employee white collar workers primarily or provide services that can be done

at the distance. You have highly educated people for them. This recovery is well on its way, and in fact, at some companies really there's been kind of a boom and demand for things like cloud services or grocery stores. There's been a rise in shopping for necessities. For companies like Amazon, things are actually better than they work. Home depot catering to people who are sort of adding onto

their house or improving their house and yard. But the other half, the or the other part of the population is on that lower arm of the k. These are people whose jobs depend on face to face contact and yet don't benefit from this demand for you know, home

building supplies and that kind of thing. These are people who are in many cases on the lower end of the educational spectrum, people who are in the lower end of the wage spectrum, and then places that are really heavily dependent on tourism and travel, which of course our industries that have been really hard hit. So let's break it down a little bit as far as how it

goes for workers. It really does seem to be that people and the industries and all that they were able to send their employees home to work from home really are doing the best. And then the businesses that are catering to them. So you know, you talk about like Amazon doing really great because people are just ordering stuff from home, they're sending things there, So those industries have

also been doing good. So this kind of work from home thing really seems to be a major turning point in how well people are doing if you think about it. The economic crisis was brought about because of the shutdowns that were done in response to a virus, right, and a virus transmits you know, it's contagious among people when they're in relatively close proximity to each other. So the shutdowns were aimed to stop that. And so what did

you do? You you really send people home and if you could keep working, like I can keep working, I can do my job from home, a lot of white collar workers can and they did, and their companies adapted, and that took little effort and probably a little bit of expense, like more zoom meetings and and maybe some people got allowances for a desk chair or something at home and that actually prompted some spending. But a lot of people can't do that. There are some jobs that

it's just very difficult to do at home. Some of those have been coming back, as you know, the auto garageestive reopen and that sort of thing in places where maybe people aren't face to face with their customers or one another quite so much, or you can adapt the business model to that, but their businesses where that's not the case. Think about a movie theater, think about live sports,

think about theaters and concert venues. I mean, these are all places where people go to be together to see something live and in person, and that's really hard to fix in a pandemic. And those people that work on those industries, you know, a lot of them saw furloughs for the first few months. A lot of those furloms are becoming permanent. Now you mentioned movie theaters. Regal Cinemas is closing, basically suspending all operations in the United States.

Disney announced twenty eight thousand layoffs last week. You know, these furloughs are becoming permanent, and so they're really feeling the pain of it, and that's just kind of prolonging how long their return will be. In a real sense, what you're seeing is the cautious optimism of the first part of the pandemic really turn into pessimism for a lot of people. And one thing they ask is is they ask people whether they think they are layoffs or

temporary or permanent. And just as the summer has worn on and now we're in the fall, you really saw a fewer and fewer people saying that they thought there layoffs, we're just going to be temporary. In other words, there's this realization that at least for certain segments of the economy and places in the country, this is not going to be a temporary thing. This is going to drag on. The economic return is kind of uneven all over the place. You know, I suggest everybody go and read the article

because you laid out really well. But you know, there's the workers, there's the industries, and there's the regions. Also, you mentioned tourism. All these states and cities that dealt heavily with tourism, they're seeing an uneven return. Hawaii because their travel restrictions in place, has seen a big downturn. Las Vegas the same way, Los Angeles, New York. All these big hubs where people would go all the time, you know they're not going or it's harder for them

to return as well, and their workers as well. You look at two places right next to each other, like Nevada and Utah states are literally next story to each other. Nevada has been hit very hard and Utah is among the less hard hit states, and a big part of that is this dependence on face to face in this case, tourism related activity. Yeah, I mean it's tough, and the recovery, as I mentioned, is is kind of uneven all over

the place. But hopefully things start getting back into motion and we can see some of these gains back in these places that really needed. Tao Francis, Business reporter at the Wall Street Journal. Thank you very much for joining us. Thank you. I'm Austar Ramirez and this has been reopening America. Don't forget that. For today's big news stories, you can check me out on the Daily Dive podcast every Monday the Friday, So follow us in I Heart radio or wherever you get your podcast