State’s job market takes hit from coronavirus, Whatcom expected to quickly rise
While the numbers are just starting to come in, it’s becoming clear that the job losses across Whatcom and the rest of the state are going to be big.
The Washington State Employment Security Department announced that 14,154 initial unemployment benefits claims were filed for the week ending March 14, a 116% increase compared to the week before. That was before the statewide restrictions went into effect on March 17, closing bars, fitness centers and dining areas of restaurants.
To put it another way, that’s more than 2,000 Washington residents losing their job each day during the week before restrictions went into effect.
In Whatcom County the jump was much slower, but significant. For the week that ended March 14, new unemployment insurance claims totaled 238, a 20.2% jump from the previous week. The highest number of unemployment claims so far in 2020 happened in the second week of the year, when 474 were filed. In a normal economy, the second week of the year would be among the highest of the year, given that it’s the end of the holiday shopping season.
That will no doubt change when the numbers come in for the week ending March 21. Along with restaurants, bars and casinos, Whatcom County’s education sector will also see a big increase in the number of unemployment insurance claims, said Anneliese Vance-Sherman, a regional labor economist for the state. Retail businesses will also be impacted by the closing of the U.S.-Canada border and the drop in cross-border shopping.
Jobs at grocery stores and pharmacies will probably be fine, but shopping for entertainment or durable goods will suffer as people shelter in place and save their money to buffer against economic uncertainty, Vance-Sherman said in an email.
Across the state, clear trends showed the sectors that were losing the most jobs before this week’s restrictions took effect. The number of unemployment insurance claims in the food service/accommodation industry rose from 523 in week 9 to 3,647 in week 10 (which ended March 14). Unemployment claims in the education sector rose from 82 to 549 in the same period; claims in the art/recreation sector rose from 86 to 306.
What’s next for job losses?
Hart Hodges is one of those bracing for a spike in job losses. Hodges, the co-director at the Center for Economic and Business Research at Western Washington University, said after that spike, the timing for a bounce-back in the labor market will depend on testing for the virus and getting money to businesses.
On testing for the virus, Hodges believes people won’t start returning to restaurant dining rooms or gyms until there’s a reasonable certainty that people in those places don’t have coronavirus.
“Imagine, for example, if you knew everyone at a restaurant or getting on a plane had with them confirmation of a negative test result. You wouldn’t have any problem joining them,” Hodges said, adding that not testing would lead to heightened uncertainty and continued social distancing.
In terms of getting money to businesses, Hodges said the key is how much access businesses will have to loans.
He noted that a lot of businesses beyond restaurants, bars and gyms are going to struggle. With courts closed law firms are struggling; smaller health care clinics have only a fraction of their normal patient flows, he said.
“Extra unemployment benefits won’t be enough,” Hodges said, adding that loans to business owners to help pay a portion of wages might help, particularly workers they plan to hire back.
One other factor needed for a quicker bounce-back in the labor market is getting more people to take it seriously, Hodges said. If only half the people are sheltering in place, then the closures are an expensive experiment with little benefit. If more take it seriously, the sooner people can return to restaurants and gyms.
