South Jersey Pandemic Recovery Hinges on Casinos, Report Says
When the coronavirus pandemic arrived in 2020, the Atlantic City area was one of the hardest hit in the nation employment-wise.
"The employment impact of last year's pandemic-induced recession was actually significantly greater than what we saw in 2009 amid the Great Recession," Oliver Cooke, associate professor of economics at Stockton, told the Townsquare News Network.
Cooke created and compiles regular updates to the South Jersey Economic Review, which in its summer 2021 edition assesses the impact of the COVID-19 crisis and offers an outlook for the region.
"Should the national recovery continue to gather steam over the remainder of 2021 — as many forecasters believe is likely — it would be especially welcome news for the southern New Jersey regional economy," the report says.
At 16%, the Atlantic City metropolitan area recorded the third largest employment decline in the nation last year. The leisure and hospitality sector, which includes casinos, accounted for two-thirds of all jobs lost last year in the area. The Ocean City metropolitan area and its leisure and hospitality sector also suffered significant job losses.
According to the report, the number of officially unemployed individuals in the AC area comes in at just under 13,000, about twice its March 2020 level.
Thanks to greater consumer confidence as vaccination efforts continue and COVID metrics improve, and consumers looking to make use of pent-up savings, Cooke expects the area and regional economy to benefit greatly in the summer ahead.
"I think the next two to three months at the shore are just going to be a bonanza, frankly," Cooke said.
Atlantic City casinos have had the green light to operate at full capacity for a number of weeks — at the onset of the pandemic, they were forced to close their doors for months, and then operated in a limited fashion.
Restaurants and shops are permitted to go back to their pre-pandemic ways as well.
Looking long-term, one major concern related to South Jersey's economic recovery is how well the casino industry rebounds, Cooke said.
"A key question that will loom over the regional economy as the national and regional recoveries play out over the remainder of 2021 and into 2022 is whether Atlantic City casino industry managers elect to return their physical properties' personnel levels to pre-pandemic benchmarks or redirect resources to higher profit margin revenue streams which require far fewer brick-and-mortar workers," Cooke said.
Brick-and-mortar winnings declined by almost 44% in 2020, but casinos were able to recoup revenue through internet gaming and remote sports betting.