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 central 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 central Utah counties, initial claims peaked in the
third week of the pandemic and have since tapered downward. Sevier County
proved the lone exception peaking in the second week. Since mid-March, more than
1,383 new claims were filed in the region. In all of 2019, only 1,270 initial claims
were filed. By week 19, claims measured considerably lower but continued to run
substantially greater than in previous years, basically on par with the Great
Recession.
Here’s another example of the tremendous flood of new claims.
Prior to the COVID-19 pandemic, counties in central Utah averaged a total of 50
first-time claims per week. This time period in early 2020 included seasonally
high-claims weeks in January. In the weeks following, an average of 173 claims
were filed each week for an increase of 604%.
However, despite this historic increase in initial claims,
most of central Utah fared much better than other regions in the state and
nation. Even though Utah had the third lowest claims rate in the nation, its
new claims increased 1,378% during the pandemic. Statewide, claims filed during
the pandemic measured 10% of employment covered by unemployment insurance laws
compared to only 6% in central Utah.
Who took the hardest hit?
Counties with a high-dependence on tourism felt the greatest
economic and employment shocks in the slowdown. In central Utah, only Wayne
County maintains a significant share of employment in tourism-related
industries. It was also the hardest hit by the COVID-19 pandemic. In Wayne
County, roughly 11% of individuals covered by unemployment insurance have filed
a claim. Moreover, many seasonal Wayne County workers were already drawing
unemployment benefits before the pandemic began. In contrast, in Millard County
only 4% of covered workers filed a claim in the weeks following the start of
the pandemic. Sanpete (5%) and Sevier (6%) counties also displayed relatively
low rates. While Piute County’s figure measured somewhat higher at 10%, many of
these claims reflect persons employed outside the county rather than within it.
Tourism and COVID-19
Especially in the early stages of the pandemic, this is a
story of tourism-dependent industries. Almost 22% of post-COVID-19 initial
claims filed in central 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 healthcare/social
assistance (reflecting the cessation of elective procedures and visits) and
retail trade. Many of these high-claims industries reflect their high share of
total employment in general. In addition, they often serve the public face to
face or have encountered damage due to the decline in demand for travel
constraints.
The High and the Low
Because of its job-to-job nature, the construction industry
typically accounts for 30-50% of first-time claims in the region. 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 4% of first-time claims. Ease of social-distancing and good weather
have helped construction maintain its 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 in the region laid off few employees. Only 2% of central Utah’s
covered agricultural workers have filed a claim during the COVID-19 pandemic.
Public administration, utilities, mining and educational
services (including public and higher education), have also managed to keep a
higher percentage of their workforces employed.
County by County
Millard County
- Along with Beaver County, Millard County showed the lowest COVID-19-related claims rate in the state (4%).
- Millard County has relatively high concentrations of employment in industries (such as covered agriculture and utilities) least affected by the pandemic.
- Prior to the COVID-19 pandemic, Millard County averaged three unemployment claims per week compared to 26 new claims afterward, an increase of 758%.
- Unlike most areas where accommodations/food services generated the largest number of claims, in Millard County, healthcare/social assistance topped the industry ranking followed by retail trade.
- Construction, healthcare/social assistance and accommodations/food services showed roughly equal claims as a percentage of covered employment.
- Millard County accounted for 12% of the Central Utah Region’s new claims prior to the pandemic, and 15% of claims during the pandemic.
Piute County
- Less-populated Piute County maintains little employment covered under Utah’s unemployment insurance laws. In addition, a notable share of residents are employed in other counties which muddies some analysis.
- Prior to the COVID-19 pandemic, Piute County averaged one new claim per week, compared to an average of four claims per week during the pandemic. This change represents an increase of 610%.
- Roughly 45% 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.
- Other industries contributed few new claims.
- Piute County accounted for the same percentage (2%) of the region’s claims before and during the pandemic.
Sanpete County
- After spiking in the early weeks of the slowdown, Sanpete County’s claims are now running roughly equivalent to the numbers experienced in the previous recession. In most Utah counties, first-time claims continue to flow in at a much higher level.
- In the weeks before the COVID-19 pandemic, Sanpete County averaged eight initial claims per week. After the pandemic hit, claimants filed an average of 58 claims per week, marking an increase of 588%.
- In Sanpete County, first-time claims during the pandemic period measured 5% of covered employment. That places Sanpete County near the bottom of a county-by-county ranking.
- Unusually, healthcare/social assistance showed the highest number of new claims followed by the “usual suspect” — accommodations/food services — in the second spot.
- Sanpete County showed a notably high share of claims emanating from an unspecified industry.
- The relatively high percentage of mining claims compared to industry employment in Sanpete County likely reflects individuals working in other counties.
Sevier County
- Sevier County generated the highest number of claims in the region during the pandemic.
- Prior to the COVID-19 pandemic, Sevier County averaged 10 first-time claims per week compared with 58 claims during the pandemic. This increase of 627% ranked as the largest in the region, but far below the statewide average of 1,378%.
- Accommodations/food services, healthcare/social assistance and retail trade originated the highest number of initial claims after the pandemic hit.
- More than one-fourth of Sevier County’s COVID-19 initial claims were initiated in the accommodations/food services industry.
- Sevier County’s regional share of new claims held relatively steady before and during the pandemic.
Wayne County
- Of the five counties located in central Utah, Wayne County maintains the heaviest dependency on tourism-related employment. It also shows the highest first-time claims to covered employment ratio in the area.
- Before the COVID-19 pandemic, an average of three initial claims were being filed in Wayne County compared to an average of 14 claims in the following weeks. The pre-to-post-COVID-19 increase registered 410%, the lowest in the region. Many seasonal workers were already drawing unemployment insurance benefits.
- 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.
- Here too, accommodations/food services was the source of the largest number of new claims, trailed far behind by retail trade.
- More than half of all new claims during the pandemic time period originated from accommodations and food services. Roughly 20% of workers in this industry filed a new claim for unemployment after the start of the COVID-19 pandemic. Many seasonal workers were already receiving benefits.
