Even as the economy reopens, Whatcom County residents are still losing jobs. Here’s why
Even as Washington state begins the process of reopening during this coronavirus pandemic, residents are still losing jobs.
For the week ending June 13, there were 29,028 initial regular unemployment claims across the state, according to the latest data from the state’s Employment Security Department. While that’s way down from the 100,000-plus weekly claims in March, April and May, it shows workers are losing jobs even as businesses are reopening.
In February, before the COVID-19 restrictions took effect, the state’s weekly jobless claims were around 6,000.
In Whatcom County, 955 people filed their first jobless claims last week, an increase of 154 compared to the week ending June 6. Manufacturing had the highest number of jobless claims, followed by food/drink jobs, construction and specialty trades, which would include jobs like plumbers and painters.
For Whatcom County, the rise in manufacturing jobless claims could be a result of the fallout from the announced curtailment of the Intalco Works aluminum smelter near Ferndale. That facility had around 700 workers, and Alcoa has been laying off workers in preparation for the end-of-July curtailment.
The Bellingham area and northwest Washington generally are being impacted to a greater extent than most areas, said Anneliese Vance-Sherman, a regional labor economist for the state.
“The way I read this has a lot to do with our concentration of employment in leisure and hospitality and healthcare, but also our deep connections with the aerospace manufacturing industry which is facing challenges related and unrelated to COVID-19,” Vance-Sherman said in an email. “Whatcom County retail also counts on a steady flow of Canadian traffic, which is being impacted by a hardened border.”
Why jobless claims remain high
Unemployment and jobless data will probably continue to bounce around quite a bit, said Hart Hodges, co-director at the Center for Economic and Business Research at Western Washington University. It will be volatile because the economic collapse was swift and various rescue programs will impact the data in different ways.
For example, some companies have kept their paying workers with the federal Paycheck Protection Program. Many of the businesses involved in that program had eight-week loans. With those loans expiring, some companies are still unable to rehire all their workers due to capacity restrictions in early reopening phases, leading to layoffs. The timing of the loans, how fast a business can reopen and how many employees are needed are some of the factors creating labor force volatility, Hodges said in an email.
Smaller manufacturing businesses are also trying to manage a lot of uncertainty, Hodges said, noting several companies have told him that demand has not been steady.
This recession is different
Hodges said a recession induced by a global pandemic is different than the recent economic downturns this country has experienced. While previous recessions saw big job losses in technology and finance, this one suffered a huge drop in service sector activity, such as restaurants, salons, air travel and health care.
“People in finance and many tech jobs just switched to working from home,” Hodges said. “When you depress the service sector... you disrupt the labor market in significant ways.”
When you add in that many service jobs may become automated, whether through technology or as a way to slow the spread of the pandemic Hodges expects it will be a slow grind getting back to a normal labor market anytime soon. It could be years, but an effective vaccine could speed recovery.
It’s all a part of businesses and workers navigating a highly-uncertain and rapidly-changing environment, Vance-Sherman said.
“The longer we are impacted by the ‘virus economy,’ the longer it will take to return. We’ve been in this situation long enough that the way we interact with each other and our assessment of risk is changing,” Vance-Sherman said. “If all restrictions were lifted tomorrow, I doubt that everything would return to ‘normal’ immediately.”
The manufacturing industry had the largest amount of job losses last week across the state, with 3,671 new claims. That’s followed by the health care industry (3,583 new claims) and food services (3,240 new claims). The health industry includes a wide range of jobs beyond hospital workers, including dentists and chiropractors.
Five counties in Washington had more than 1,000 new jobless claims last week, with King County topping the list with 8,753.
