Why unemployment claims are so much higher in Kentucky, Hawaii and Georgia

8 May 2020 - Alicia Wallace (CNN Business)

During the past seven weeks, more than 30% of the March labor force in Kentucky, Hawaii and Georgia filed initial claims for unemployment benefits.

They're the three hardest-hit states in the nation, yet their employment landscapes have been rocked in unique ways.


Department of Labor data released Thursday showed 671,288 Kentuckians filed initial claims for jobless benefits during the last seven weeks. That's equal to about 32.7% of Kentucky's labor force in March.

The restrictions aimed at slowing coronavirus' spread weighed heavily on Kentucky's manufacturing-centric economy, which accounts for 12.9% of the state's total non-farm employment, said Michael Clark, the 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 mid-March, automakers Ford and Toyota -- two of the state's largest private-sector employers -- idled their respective plants in Louisville and Georgetown. More than 20,000 people were temporarily laid off. The two plants are expected to reopen this month, according to The Courier-Journal.

When large outfits like that close, it typically ripples through the manufacturing chain, affecting smaller suppliers, he said.

Clark was quick to offer a caveat to the sizable data, noting that the many among the 33% that filed initial unemployment claims aren't permanently jobless.

"It's not necessarily that all these jobs are gone," he said.


When tourism ground to a halt, so did the lion's share of Hawaii's economy.

"Twenty-six percent of jobs and close to 20% of GDP is directly attributed to tourism," Carl Bonham, economics professor and executive director of the University of Hawaii Economic Research Organization said in an interview with CNN Business. "And so we're going to be hit really hard simply because of that."

In Hawaii, 210,429 people filed initial claims for unemployment benefits during the past seven weeks, representing 31.5% of its March labor force, according to Department of Labor data.

Hawaii sought to move swiftly to help flatten the curve, Bonham said, noting Governor David Ige's move on March 17 directing bars and restaurants to close dine-in service.

Despite a large federal government presence, which accounts for 20% of the economy and is a "stabilizing force," the Aloha State is heavily service-oriented even beyond tourism, he said.

As such, Hawaii is expecting a slow climb out unless there's a way to help people retain confidence in travel, he said, adding that

"We're, in many ways, at the mercy of policy decisions that we don't have much control over," he said. "If we had a national policy and a national effort to manufacture enough tests so that we could test all the visitors, that would change things dramatically."

He continued: "In the meantime, we have to build a system locally to manage the risk and balance the risk of infections."


Nearly 1.6 million Georgians have filed for unemployment benefits over the past seven weeks, accounting for 31.1% of the state's March labor force, according to Labor Department data.

Unlike Kentucky and Hawaii, the layoffs in Georgia appear to be more widespread across a variety of industries. In comments to the Department of Labor accompanying the report, the state of Georgia referenced increased layoffs in trade, educational services, information, administrative, waste management, transportation, warehousing and construction.

In an Atlanta Journal-Constitution report on the state's employment picture, economists offered a number of potential explanations to account for Georgia outpacing much of the nation.

Those included claims potentially being processed more quickly than other states; a greater share of food service and accommodation businesses; businesses and contractors dependent upon airline operations such as the Atlanta-based Delta; and Georgia serving as a primarily at-will employment state, according to the report.

The sectors that accounted for the largest share of the claims included accommodation and food services and retail trade, according to the Georgia Department of Economic Development.

"Georgia also started this with an historically low 3.1% unemployment rate, so these numbers also demonstrate why the state has been focused on getting Georgians back to work safely, and making sure that our businesses have access to supplies and personal protective equipment needed to give employees and customers protection and confidence," according to a statement emailed to CNN Business from the Department of Economic Development.

-- CNN Business' Annalyn Kurtz contributed to this report.