A large number of businesses are mostly shut down for public health reasons, others are facing greatly diminished demand or are likely to shut down in the near future. Using data from the Bureau of Labor Statistics Current Employment statistics by detailed NAICS industry codes, we can measure how many people work in these most exposed businesses. Six of the most directly exposed sectors include: Restaurants and Bars, Travel and Transportation, Entertainment (e.g., casinos and amusement parks), Personal Services (e.g., dentists, daycare providers, barbers), other sensitive Retail (e.g., department stores and car dealers) and sensitive Manufacturing (e.g., aircraft and car manufacturing). In total, these sectors account for just over 20% of all US payroll employment, so shutdowns of these sectors on their own will lead to massive declines in employment. These will be offset partially by increased hiring in grocery stores, package delivery, etc., but this is unlikely to do much to dampen the blow.
This will likely get much worse if these shutdowns persist for multiple months and to the extent that they start to spill over substantially into other sectors like construction and broader manufacturing. Policy measures to reduce the depth and long-run effects of the recession should focus on 1) limiting the spread of the virus itself through direct health spending and allowing for effective social distancing, such as paid sick leave, expanded unemployment insurance and providing the tools for businesses with lots of in-person contact to idle; 2) providing liquidity so that households in shutdown industries can continue to shelter at home, eat, and not face devastating declines in their financial conditions. These policies will limit the long-run harm of the recession and also reduce the spillovers into less directly affected industries. Note that providing liquidity also helps with allowing for social distancing and the first policy goal.