- In 2023, just as a historic summer heat wave has been hitting much of the country, real-time data from Gusto shows that economic activity among small and mid-sized businesses (SMBs) that are dependent on outdoor activity has fallen to levels not seen in any summer in the past four years.
- We examine workers’ average hours in industries likely affected by the heat (Tourism, Arts & Entertainment, and Sports & Recreation), and compare this summer to the summers of 2019-2022. In Texas, we see a 20% drop in the average worker’s hours per week compared to prior years, and in Arizona, there has been a 10% fall in hours worked. There has not been a significant drop in hours at similar companies in the rest of the country.
Hours at Texas SMBs in Outdoor-Dependent Industries Drop 20%
- As shown in the top chart, average employee hours per week among Texas companies in exposed industries (Tourism, Arts & Entertainment, and Sports & Recreation) have dropped to an average of 19.6 across the past four weeks – a fall of 20% from their average of 24.5 hours over the same weeks from 2019 through 2022.
- We see no significant drop when looking companies in the same sectors outside of Texas this summer. Collectively in those other states, average weekly hours are standing at 20.5 this year, compared to 21.4 in prior years (-4%).
Arizona SMBs See a 10% Drop in Weekly Hours Amid Heatwave
- As shown in the top figure below, among companies in such sectors in Arizona, average weekly hours dropped to 26.7 hours per week – a fall of 10% from their average of 29.9 over the same period across 2019-2022.
- In the bottom panel, we can see no significant drop on average among similar companies outside of Arizona this summer. Together, weekly hours are averaging 27.2 hours this year, compared to 27.9 in prior years (-2.5%).
Methodology
This analysis uses platform payroll data from the 300,000+ SMBs on Gusto’s platform. We compare average weekly hours among companies in sectors likely directly affected by extreme outdoor heat: Tourism, Arts & Entertainment, and Sports & Recreation. We calculate weekly hours from January 2019 through the week ending July 15, 2023. Weeks are compared across years using retail weeks as defined by the National Retail Federation’s 4-5-4 calendar.
