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Effects of restaurant, hotel layoffs to spread

By John Seelmeyer
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Feature Image: Ryan McGinnis

The pain felt by restaurant and hotel employees who are losing their jobs soon will be felt elsewhere in the Reno-area economy, too.

Eugenia Larmore, PhD, the president of Ekay Economic Consultants Inc. in Reno, says that every dollar lost in the restaurant business in Washoe County results in an additional 69 cents of economic losses elsewhere in the economy. 

These additional losses come from the so-called ripple effect, as restaurant workers spend their pay on groceries, apartments and all the other necessities of daily life.

In the hotel sector, every $1 that isn’t spent in Washoe County because of shutdowns related to the coronavirus results in lost revenues of 75 cents elsewhere in the economy — a total loss, then, of $1.75.

Among the sectors of the local economy that can expect to be hit by restaurant and hotel layoffs, the economist says, are the commercial real estate firms that lease space to restaurants, electric utilities, insurance firms, media that carry advertising and providers of medical care.

Larmore says the figures are based on data generated by IMPLAN, a complex tool developed by a North Carolina company to analyze the workings of the economy.

Hotel and restaurant jobs account for about 13 percent of the workers in Washoe County — about 33,000 jobs in total in the two sectors.

Those jobs don’t pay particularly well, Larmore notes. Hotel workers make about 63 percent of the average county weekly wage of $1,007, and restaurant and bar workers make about 39 percent of the average county wage.

“Not only are these wages low, many of the employees work fewer than average hours,” she notes.

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