By Lecia Parks Langston, Senior Economist
“You have power over your mind — not outside events. Realize
this, and you will find strength.” Marcus Aurelius
In the wake of the COVID-19 pandemic, businesses lost
revenues and workers lost jobs. But because of the time it takes to collect and
collate data, economists have been left without much information to quantify
the economic impacts at the local level.
But there is one ray of data illumination. Claims for unemployment
benefits are promptly available and provide information about a large cross
section of the economy. This post will outline what light unemployment claims data
sheds on the state of southwest Utah’s economy.
While not all workers are protected by unemployment
insurance laws, roughly 95% of jobs are covered. This makes claims data an
exceptional source of information about the economy. Not included under
unemployment insurance laws are most self-employed workers, about half of
agricultural employment, unpaid family workers, railroad personnel (covered
separately) and many nonprofit organizations (such as churches). Also, some out-of-work
employees may not have worked a sufficient work history to qualify for
unemployment insurance benefits, but may file anyway. Fortunately, in this time
of economic distress, the social safety nets of the unemployment insurance program,
special national COVID-19 funding and social programs are working together to
keep workers’ income and well-being stable.
Unemployment claimants and the unemployed; they aren’t the same
Also, keep in mind that, in addition to individuals drawing
unemployment benefits, the unemployment rate includes those entering and
re-entering the workforce and noncovered groups without current employment.
This means the number of “unemployed” will be greater than the number of
claimants. In “normal” times, only about 40% of the “unemployed” are claiming
benefits. The generally reported unemployment rate also has a work-search
requirement. If you haven’t made any minimal attempts to find work, you aren’t
counted as “unemployed.”
Watch this Space
While this analysis won’t be updated regularly, new data
will be added to the data visualization on a weekly basis allowing readers to
check back for the latest information.
An Unprecedented Event
Not surprisingly, first-time claims for unemployment benefits
soared in Utah and across the nation as the pandemic swept across the country. This
increase is unprecedented since the creation of unemployment insurance coverage
during the Great Depression. Week 12 (beginning March 16) marks the start of
this unparalleled surge in claims. On a positive note, while new claims for
unemployment benefits have skyrocketed in Utah, the state currently shows one
of the lowest claims rates in the nation.
For most southwest Utah counties, initial claims peaked during
week 13 (starting March 23) and have since tapered downward. During the peak week
13, initial claims filed totaled 2,364 in southwest Utah. In all of 2019, only
3,803 claims were filed in the region. By week 19, claims measured considerably
lower but continued to run substantially greater than in previous years — even
during the Great Recession.
Here’s another example of the tremendous flood of new claims.
Prior to the COVID-19 pandemic, counties in southwest Utah averaged a total of
82 first-time claims per week. This time period in early 2020 included
seasonally high claims weeks in January. In the weeks after, an average of
1,343 claims were filed for an almost unbelievable increase of 1,538%.
Who took the hardest hit?
Counties with a high-dependence on tourism have felt the
greatest economic and employment shocks. In Garfield County, with the highest
share of tourism-related employment in the state, roughly 20% of individuals
covered by unemployment insurance have filed a claim — twice the rate of the
state (10%) Moreover, many seasonal Garfield County workers were already
drawing unemployment before the pandemic hit. In contrast, in Beaver County,
only 4% of covered workers filed a claim during the pandemic. Iron (9%), Kane
(10%) and Washington (11%) also felt the repercussions of upswing in furloughs
and job loss.
Tourism and COVID-19
Especially in the early stages of the pandemic, this is a
story of tourism-dependent industries. Almost 23% of post-COVID-19 initial
claims filed in southwest Utah represented workers previously employed in accommodations
and food services. In addition, the true effect of the pandemic on this
industry is masked by a large number of claims classified as industry “unknown”
in the early days of the claims flood. Undoubtedly, many of these claims would
rightfully be classified in accommodations/food services if the appropriate information
were available.
Other high-claims industries included retail trade,
healthcare/social assistance (reflecting the cessation of elective procedures
and visits) and administrative support/waste management/remediation (the home to
temporary employment agencies). Many of these high-claim industries reflect their
high share of total employment in general. In addition, they often serve the
public face to face or encountered damage due to the decline in demand for travel.
The Industry Flow
While most of the high-claim industries felt the pain of the
pandemic early on, other industries surged in later weeks. As the economic
effects of other closures worked their way through the economy both
manufacturing and transportation/warehousing proved relative latecomers to the
layoffs in southwest Utah.
The High and the Low
Although accommodations/food services has generated the
largest number of southwest Utah initial claims in the COVID-19 pandemic time
period, in percentage terms, other industries have actually suffered more. For
example, in the extremely small management of companies industry, roughly 50%
of workers have filed for claims. The administrative support/waste
management/remediation industries, which includes temporary employment firms,
shows a first-time claims rate of 27%.
Because of its job-to-job nature, the construction industry
typically accounts for 15-20% of first-time claims. However, although
construction’s new claims have also increased, they have increased at a much slower-than-average
rate. After the COVID-19 pandemic hit, construction contributed only about 5%
of first-time claims. Ease of social-distancing and good weather have helped
construction maintain employment levels. New claims measured just 3% of covered
construction employment.
Only a portion of agricultural employment is covered by
unemployment insurance laws. However, as companies work to keep America fed,
agribusiness has laid off few employees. In Iron and Beaver counties, covered
agriculture plays a notable role in the economy. However, only 1% of southwest
Utah’s covered agricultural workers have filed a claim during the COVID-19 pandemic.
Public administration, educational services (including
public and higher education), finance/insurance and utilities have also managed
to keep a higher percentage of their workforces employed.
County by County
Beaver County
- Prior to the COVID-19 pandemic, Beaver County averaged 2 unemployment claims per week compared to 16 new claims afterward, an increase of 834%.
- Because of its relatively small share of hard-hit tourism-dependent employment and higher-than-average share of lightly-hit covered agricultural employment, Beaver County has shown a smaller increase in claims due to the pandemic.
- New claims as a percent of covered employment measured just 4% — one of the lowest rates in the state.
- As in many other areas, accommodations/food services produced the highest number of new claims, with few claims in healthcare/social assistance.
- Unusually, arts/entertainment/recreation also contributed a high number of new claims.
- Beaver County accounted for 2% of the Southwest Region’s new claims prior to the pandemic, but only 1% of claims afterward.
Garfield County
- Despite having the highest percentage of leisure/hospitality employment in the state, Garfield County ranked third for the percentage of initial claims filed as a share of covered employment (20%) after the COVID-19 pandemic hit. This is likely because many seasonal workers were already drawing unemployment insurance payments when the pandemic began.
- Prior to the COVID-19 pandemic, Garfield County averaged six first-time claims per week, compared to an average of 53 claims per week afterwards. This change represents an increase of 856%.
- Nearly 70% of claims were filed from workers furloughed from the accommodations/food service industry. A large share of claims from the “unknown” industry category most likely originated from this industry as well.
- Apart from retail trade, other industries contributed few new claims.
- Seasonal claims from the colder months meant Garfield County’s initial claims actually accounted for a larger share (6%) of the Southwest Region’s figure before the pandemic than after (4%).
Iron County
- In the weeks before the COVID-19 pandemic, Iron County averaged 16 initial claims per week. After the pandemic hit, an average of 236 claims were filed per week, marking an increase of 1,390%.
- In Iron County, first-time claims during the pandemic measured 9% of covered employment. That places Iron County in the bottom half of a county-by-county ranking.
- As in many counties, Iron County’s accommodations/food service industry accounted for the highest number of new claims during the COVID-19 slowdown.
- Healthcare/social assistance and retail trade ranked second and third respectively for new claims.
- First-time claims from the manufacturing spiked in late April.
Kane County
- Despite having a high percentage of tourism-related employment, the county showed a middle-of-the-pack ranking for new claims as a share of covered employment (10%). As in Garfield County, many seasonal employees were already drawing unemployment benefits prior to the pandemic.
- Prior to the COVID-19 pandemic, Kane County averaged a nominal two first-time claims per week compared with 44 claims after the pandemic struck. This increase of 1,708% ranked as the largest in the region.
- Accommodations/food services, retail trade and arts/entertainment/recreation generated the highest number of initial claims during the pandemic.
- Roughly 44% of Kane County’s post-directive initial claims originated in the accommodations/food services industry.
- Kane County’s regional share of new claims held steady before and during the COVID-19 pandemic.
Washington County
- Not surprisingly, the county with the largest employment in southwest Utah also generated the largest number of COVID-19-related first-time claims. However, its share of claims increased from 69% prior to the pandemic to 74% during.
- Before the COVID-19 pandemic, an average of 56 initial claims were being filed in Washington County compared to an average of 994 claims in the following weeks. The pre-to-post-pandemic increase registered 1,668%
- Initial claims for unemployment benefits filed during the pandemic as a percent of covered employment measured 11%, near the middle of a ranking of all Utah counties.
- Although it has a higher-than-average share of employment in accommodations/food services industry, Washington County’s economy is more diverse than many less-populated counties in the state. This industry’s share of claims in Washington County measured only 19% compared to 69% in Garfield County and 44% in Kane County.
- Here too, accommodations/food services was the source of the largest number of new claims followed by retail trade, administration support/waste management/remediation (which includes temporary employment agencies) and healthcare/social assistance.
- Claims originating from both manufacturing and transportation surged towards the end of the pandemic time period.
