Pa. new jobless claims jump to 649,000 since March 15

Mar. 26--Pennsylvania has seen almost 650,000 new claims for unemployment compensation in less than two weeks -- an indication of just how hard the governor's order closing non-life-sustaining businesses and its ripple effect has slammed the state's economy.

Gov. Tom Wolf said he expects the figure to climb to 800,000 through Friday.

"That's about 10% of the new claims (in the country)," Wolf said Thursday. "Pennsylvania is really the epicenter of the unemployment insurance claims, and we're doing everything we can to make sure we turn these things around as quickly as possible."

Pennsylvania has the third-highest rate of unemployment claims in the country, as reported by CNBC.

Jobless workers in Pennsylvania filed 378,900 initial unemployment claims from March 15-21. An additional 271,000 claims were filed this week through Wednesday, according to new figures from the state Department of Labor and Industry. The highest single day for filing was Monday, with nearly 87,000 claims submitted.

"It's going to get worse before it gets better," said Frank Gamrat, an economist and executive director of the Allegheny Institute for Public Policy in Castle Shannon.

With state unemployment offices closed, some workers who lost their jobs may have yet to file claims, Gamrat said.

On March 16, Wolf asked non-essential businesses to close for two weeks -- a request that became an order three days later -- in an effort to curb the spread of the coronavirus, which has killed 16 in Pennsylvania so far, 1,000 nationwide and more than 20,000 globally. Enforcement began Monday.

Some businesses are "just hanging on," Gamrat said, and any further extension "may be enough to kill them."

The $2 trillion relief package approved by the Senate late Wednesday night will be taken up by the House on Friday, where it is expected to pass quickly and be signed by President Trump. The massive program includes federal supplements to unemployment benefits, along with billions in loans to small businesses in effort to retain jobs.

Pittsburgh-area economist Chris Briem had predicted that about 515,000 jobs in the seven-county Pittsburgh region would be directly impacted by the coronavirus-related closures of schools, restaurants, bars, hotels, construction sites and restrictions on other businesses, such as eliminating dining in restaurants.

Tens of thousands of those affected jobs will likely come from the hospitality industry alone, said John Longstreet, president and CEO of the Pennsylvania Restaurant and Lodging Association.

National figures show that about 70% of hotel-related employees nationwide have been laid off as hotels that were once operating at about 65% occupancy struggle to get by with fewer guests, only filling up about 30% of rooms, Longstreet said.

Hotels in the Pittsburgh area have been hit even harder, with many operating at occupancy rates in the high single digits, he said.

"Nationwide, about 50% of the occupancy in hotels is corporate and business travel, and that, of course, has all stopped," Longstreet said. "So the only people that are really staying in hotels now are people who are stranded, or who had to go to a hotel because they didn't have anywhere else to go."

The Builders Guild of Western Pennsylvania, which represents building trade unions and contractor associations, has about 42,000 members across 33 counties in Western Pennsylvania.

About 75%, or about 31,500, of those people are not working right now after being laid off from projects, with a high concentration of those workers in the southwestern part of the state, said Jeff Nobers, director of the guild.

"I don't think in the construction industry, certainly not in the time that I've been in it, that I remember 75% of the workforce being laid off," Nobers said. "Even in the worst recessions, you still had activity in construction going on."

Though it's not out of the norm for construction workers to endure seasonal lulls and layoffs of two to four weeks in between projects, halting construction across the state has been jarring, Nobers said.

"There's so much uncertainty, and no one can really say it's four weeks, or six weeks, or two weeks," he said.

On a national scale, the widespread economic shutdown because of the coronavirus pushed new jobless claims to almost 3.3 million -- more than four times the record set during the 1982 recession. Nationwide, unemployment reached almost 11% in 1982, while the Pittsburgh region's jobless rate was much higher because of the collapse of the steel industry.

Initial jobless claims are typically a forerunner of the unemployment rate. Unemployment in January, the latest month for which figures are available, was 4.7% in Pennsylvania and 4.6% in the Pittsburgh region.

Duquesne University Associate Professor of Economics Risa Kumazawa said the economy is headed for a recession, "if we're not in a recession already."

"The duration and severity of this is going to depend on how well we contain the coronavirus," Kumazawa said.

Some businesses are looking to get employees back to work before the end of the pandemic.

As of Tuesday, the state Department of Community and Economic Development received about 15,800 requests for exemptions from Wolf's shutdown order.

By close of business that day, about 3,000 waivers had been granted, 3,300 had been denied and about 2,300 were submitted for activities for which no waiver was required, according to figures released by the department.

Individual waivers do not always apply to a single business. For example, they could be granted for specific construction projects tied to a life-sustaining business, like a hospital.

Companies in the manufacturing industry have been seeking waivers to bring businesses back online that produce items like batteries, as well as the paints and glazes used for medical equipment, said David N. Taylor, president and CEO of the Pennsylvania Manufacturers' Association.

Manufacturers that produce the raw materials used to make fabric and paper goods that could be tied to life-saving efforts, or those that power processes that are deemed essential, like coal mining that supports steel production, have also been included in those efforts, he said.

Allowing businesses to reopen safely -- with health check-ins, disinfecting procedures and social distancing practices -- could also help the economy in the long run, Taylor said.

"We need businesses to survive," he said. "People can't get paid leave from a business that has gone under.

"So in as much as we are properly focused on the immediate challenge of health from the pandemic, we also need to be concerned about the economic well-being of workers and business owners, so that when we get to the other side of this, we want there to be a base to rebuild from."

___

(c)2020 Tribune-Review (Greensburg, Pa.)

Visit Tribune-Review (Greensburg, Pa.) at www.triblive.com

Distributed by Tribune Content Agency, LLC.