Tuesday, June 2, 2020

Unemployment Insurance Claims Data Shed Light on the Local Economic Impacts of COVID-19 Public Health Directives


By Lyndsey Stram, Regional Economist; 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 the Castle Country Region’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 non-covered 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 on a regular basis, 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.

Emery County saw its peak in first-time claims in week 13 and Carbon County saw its peak in week 14, the first and second weeks after the COVID-19 pandemic hit. Both counties have seen initial claims drop sharply since then. Carbon County, however, did have another uptick in week 19. Both of the Castle Country counties are now down to initial claims levels comparable to those that occurred in 2009 during the Great Recession.

Who took the hardest hit?

The largest industry shares of initial claims filed in the region belonged to healthcare/social assistance. Tourism is the industry suffering the most right now in many areas and accommodation/food service claims also account for over 15% in the region.

In the initial weeks of the pandemic, many claims (135, or 15% in Castle Country) were filed in unknown industry. Most likely many of these can be accounted for by the healthcare/social assistance and accommodation/food services sectors.

Tourism and COVID-19

Especially in the early stages of the restrictions, this is a story of tourism-dependent industries. Approximately 16% of COVID-19 initial claims filed in Castle Country represented workers previously employed accommodations and food services. In Carbon County, 14% of the total claims, and 21% of the claims in Emery County, belong to the accommodation/food service sector.

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, wholesale trade proved to be a latecomer to the layoffs in Castle Country, partially responsible for the spike in claims in week 19.

The High and Low

Although healthcare/social assistance and accommodations/food services have generated the largest number of claims in the region during the COVID-19 time period, in percentage terms, other industries have suffered more. For example, 38% of the administrative support/waste management/remediation workforce (which includes temporary employment firms) have filed a claim for unemployment benefits. More than 20% of both the real estate/rental/leasing and management of companies sectors have filed for benefits, as well.

Other industries have been able to hold on to larger shares of their workforces. Construction has seen extremely low filing percentages, as well as manufacturing. Surprisingly, retail trade in Castle

Country also accounts for a small portion of the claims. This is likely due to a large share of the retail trade in rural areas being deemed “essential” and allowed to remain open.

County by County

Carbon County
Prior to the COVID-19 pandemic, Carbon County averaged 10 first-time claims per week, this has now increased to 86.
First-time claimants, as a share of covered employment in Carbon County, has remained lower than the state average at 8%.
A majority of the claims filed in Carbon County belong to the healthcare/social assistance sector as elective medical services were halted during the peak of COVID-19 concerns in the area.
Before the COVID-19 pandemic, Carbon County accounted for 63% of the initial claims for unemployment in the region. It accounted for 75% during the pandemic.

Emery County
Prior to the COVID-19 pandemic, Emery County averaged six first-time claims per week and has increased to 28 on average in the weeks since.
First-time claimants, as a share of covered employment in Emery County, has remained lower than the state average at 7%.
Like much of the state, the majority of the claims in Emery County belong to the accommodation/food services and healthcare/social assistance sectors.
Before the COVID-19 pandemic, Emery County accounted for 37% of the initial claims for unemployment in the region. It accounted for 25% during the pandemic.