ARIZONA — Arizona’s jobless ranks continue to soar due to the COVID-19 shutdown, with the system overwhelmed when it comes to getting people benefits.
Another 129,000 Arizonans filed for benefits for the week ending on April 3, compared to 99,000 the week before, 29,000 the week before that and fewer than 3,000 at the end of February.
The impact is especially pronounced in Navajo and Apache counties, although the state has not released a county-by-county breakdown. Navajo and Apache counties already had a much higher unemployment rate than the statewide and national average. The regional jobless rate is compounded by high joblessness on reservations and a reliance on tourism in southern Navajo County. One national study estimated that hotels have a roughly 20 percent occupancy rate.
Navajo and Apache counties have among the largest per-capita COVID-19 infection rates, further increasing the impact on local businesses.
The decline in jobs at coal-fired power plants and coal mines had already caused unemployment to rise in both counties. So the shutdowns due to the virus have only compounded a serious problem in the region.
Arizona has faced a steeper rise in joblessness than most states, according to a national survey posted online by Wallet Hub. Arizona ranks 12th nationally by the percentage increase, perhaps reflecting the state’s reliance on the hard-hit tourism industry as well as a greater willingness by business to lay people off.
The number of people on unemployment rose from about 18,000 on Feb. 7 to about 81,000 on April 3 – with 129,000 new cases pending.
Even those numbers probably reflect only a portion of those laid off at least temporarily due to the effects of the virus and the governor’s “stay at home” order for “non-essential” workers. The flood of claims has overwhelmed the system and many part-time and self-employed workers don’t yet realize they’re eligible for benefits during the crisis, thanks to language in the federal relief package. People temporarily furloughed and those not working because they’re infected or taking care of infected family members can also now receive benefits.
It is now taking at least two weeks to process new claims, according to the Arizona Department of Economic Services. However, many people will qualify for a much larger weekly benefit than they would have normally. The $2 trillion federal relief measure has boosted the maximum benefit in Arizona from $240 per week to $840 per week for the next two months.
For those who complete the application process, payments will be retroactive to the date of application – since a recent change in state law also waived the normal one-week waiting period to receive benefits.
Arizona still has the second lowest maximum benefit in the nation, with a shorter period covered than most other states. The federal relief package brings the state’s benefits much closer to the national average.
However, DES spokeswoman Tasya Peterson said the state is still waiting for clear instructions from the federal government about how to calculate the maximum benefit, in view of the extra money in the relief package, according to a story by Capital Media Services.
Normally, people receiving unemployment must apply for at least four jobs a week – but that requirement will also likely be waived as a result of the federal legislation.
Experts say many additional claims haven’t yet been filed, due to the virtual crash of the system. The true national unemployment rate may be close to 15 percent, levels not seen since the 24 percent peak of the Great Depression.
The Congressional Budget Office estimates that the unemployment claims at the moment are roughly 10 times worse than the 2007-2009 recession. CBO said the unemployment rate will exceed 10 percent in the second quarter, with 3.3 million claims filed nationally on March 26 and 6.6 million more filed on the week of April 3.
However, the actual rate’s likely higher – perhaps 13 percent – when you consider the huge increase in applications each week and the many people unable to get through the crush of claims to file applications.
The leisure and hospitality industry took the biggest hit initially, mostly food service and drinking establishments. Other “notable” declines took place in healthcare, social assistance, professional and business services, retail and construction services.
The $2 trillion federal relief package included some $250 billion in additional unemployment benefits.
The package included another $500 billion in loans for small businesses affected by the pandemic. The loans would become outright grants for businesses that don’t lay off anyone – or quickly rehire furloughed workers.
As of this writing, Congress was considering a additional $250 billion increase in support for small businesses, although the rush for assistance has clogged the system and delayed approval of loans from the first installment.
The proposed $250 billion in additional money was hung up on a dispute between Republicans and Democrats. The Democrats wanted to boost the total to $500 billion, with an additional $150 billion for hard-pressed hospitals and another $100 billion for local governments, facing a plunge in tax revenues.
In Arizona, the Department of Economic Services has boosted its workforce from13 to 100 in an effort to process the flood of new claims.
The Wallet Hub study found that Arizona ranked #12 nationally when it comes to job losses from the pandemic. Unemployment claims in Arizona increased 2,500 percent compared to the same period last year and 4,000 percent compared to January.
Louisiana topped the list of hard-hit states, followed by New Hampshire, Virginia and Georgia. The least affected states included Connecticut, Oregon, Wyoming, Wisconsin and West Virginia. (https://wallethub.com/edu/states-with-the-biggest-increase-in-unemployment-due-to-coronavirus/72730/)
University of Colorado Law Professor Ahmed White observed, “this is unprecedented. The scale and intensity make it hard to conjecture what will happen. Obviously, a lot depends on how the pandemic plays out. In any case, there will be a cascading effect: the planned downturn is all but certain to evolve into a conventional recession, as the falloff in consumer demand leads to more job losses, which in turn generates a still greater reduction in demand,” he said in response to the Wallet Hub story.
He said the federal relief package will cushion the blow, but won’t “mitigate all of the hardships caused by this. This is apt to be particularly true for American workers, and most especially for the millions who have no significant savings. It may get much worse before it gets better.”