Unemployment From the Coronavirus Varies Dramatically Between States, Analysis Finds

11 May 2020 - Kate Elizabeth Queram (Route Fifty)

The percentage of each state's workforce filing for unemployment as a result of the pandemic ranges between 8% to 33%, largely depending on the industries that drive local economies.

Nearly a third of the workforce in Kentucky, Georgia and Hawaii filed for unemployment as a result of the coronavirus pandemic, according to an analysis by credit rating agency Fitch Ratings.

But even as the coronavirus has caused an unfathomable number of people to lose their jobs, at least temporarily, the crisis isn't hitting all states equally. 

On the other end of the spectrum, South Dakota (8.1%), Utah (9.1%) and Nebraska (10.5%) have the lowest percentages of workers filing for unemployment insurance for the first time from the week ending March 14 through the week ending May 2. Nationwide, the average is 18.9%, a massive increase from the beginning of the year.

“In the week before the pandemic began taking hold in the U.S., claims as a percentage of the labor force were less than 1% for all states,” researchers wrote in the report. “As the coronavirus has spread across the U.S., the change in this metric has varied substantially, both over time and across states.”

The analysis, released last Thursday, came a day before the Bureau of Labor Statistics reported that more than 20.5 million Americans lost their jobs in April, pushing the unemployment rate to 14.7%—the worst since the Great Depression.

The economic fallout from the pandemic varies from state to state and among industries. In Kentucky, the worst in the nation with about 33% of workers filing for unemployment, restrictions put in place to mitigate the spread of the virus disproportionately affected the state’s manufacturing sector. Manufacturing accounts for 12.9% of non-farm employment there, said Michael Clark, associate director of the Center for Business and Economic Research at the University of Kentucky.

“Those are jobs that are harder to work remotely—maybe simply impossible to work remotely,” Clark told CNN Business. “They’re going to be subject to greater job losses during these times of restrictions.”

In Hawaii, the economic downturn comes mostly from adverse effects to the tourism industry, which comprises nearly a quarter of the state’s economy. The “travel and leisure” sector is the area “most acutely affected by the pandemic,” the analysis says.

“As of last year, only two states had more than 15% of its workers employed in this sector—Hawaii with approximately 20% and Nevada, with nearly 25%,” the report says. “Not surprisingly, Hawaii’s claims as a percentage of its labor force is the second-highest among all states at 32% and Nevada ranks sixth highest at 27%.”

The ability of individual states to bounce back from workforce cuts will depend largely on their plans for reopening, the severity of restrictions put in place and the types of industry that dominate each economy, the report concludes.

“State differences in the spread of the outbreak and relaxation of social distancing measures, along with commercial/industrial mix and other factors, all play a role in the level of job losses and will bear on how quickly individual states can reverse those losses,” it says.