Ohio Valley Continues Unprecedented Surge Of Unemployment
This story was updated on 04/16/20 at 2:10 p.m.
Unemployment insurance claims are still reaching unprecedented levels across the Ohio Valley region.
At least 287,576 people in Kentucky, Ohio and West Virginia joined those seeking help during the economic downturn caused by the coronavirus pandemic. That’s in addition to the roughly 755,000 claims form the three states in the previous two weeks.
The data released Thursday morning by the U.S. Department of Labor showing more than 5.25 million unemployment claims around the country for the week, bringing the country’s total jobless applicants to approximately 22 million.
Labor Department figures for the week ending April 10 show Kentucky with 115,763 claims; Ohio with 157,218; and West Virginia with 14,595.
Officials from the three states are looking to the jobless figures to understand how deep of a recession the region could be in for. Backlogs across Kentucky, Ohio and West Virginia continue to be a problem with some people initially being rejected for their unemployment claim.
Kentucky officials announced this week that the additional $600 a week federal unemployment benefit has been sent out to 156,931 people totaling over $139 million. According to Josh Benton, the Deputy Secretary of Kentucky’s Workforce Development Cabinet, the state has had 521,592 unemployment claims since March 16.
Kentucky Center for Economic Policy Executive Director Jason Bailey said the unemployment assistance program is dealing with an unprecedented amount of claims and that raises an important question.
“Are the levels of support and benefits we’re offering people adequate for the kind of economic calamity that we’re really facing at this point?”
Bailey said unemployment claims could begin to decrease only to be followed by a second surge of claims as the economic fallout begins to affect different sectors of the economy.
He said the reported claims are just one portion of people who are unemployed and need assistance. It doesn’t include people whose claims are still waiting to be decided, employers who are challenging those claims, or those who aren’t yet eligible for unemployment benefits.
“Until we're fully back into recovery we need to make sure the unemployment benefits are in place so that Kentucky families and workers can make ends meet," Bailey said.
Ohio Lt. Gov. Jon Husted said there have been more unemployment claims made in the last month than there were in the last two years and the state is also still dealing with a backlog of those applications.
“We’re in this battle with the system that we have and it worked well,” Husted said. “When the unemployment rate was 4% it worked fine. Both in terms of technology and staffing. It was adequate for the task it was being called to do.”
Husted said before the pandemic there were about 42 people working in the unemployment call center and now there are almost 1,200.
The Lt. Gov. said the Ohio Department of Job and Family Services hopes to have 337 more people trained and working to address the backlog in unemployment assistance applications soon. Additionally, Husted announced that by the end of next week Ohio will begin processing the additional $600 a week in assistance from the federal CARES Act, the coronavirus relief bill.
Researcher with Policy Matters Ohio Michael Shields said neighboring states have already started distributing these payments and Ohio needs to catch up if it wants to prevent a deeper economic contraction.
“I think one of the biggest challenges is for people who would normally be excluded from state unemployment,” Shields said. “This is a place where people are experiencing real hardships because the group includes low-wage workers who earn less than $269 a week.”
Shields said that includes many of the restaurant and bar workers who have been out of work for more than a month since Ohio Gov. Mike DeWine ordered their workplaces to close. That effort was made in hopes of slowing the spread of coronavirus. Shields said Ohio needs to make the expanded eligibility for unemployment permanent. He said despite the long recovery from the last recession, many people still haven’t recovered from that economic downturn.
“We squandered an opportunity to strengthen people on tax cuts for the wealthiest that have strained our ability to respond to this, even as it strained families’ ability to cope,” he said. “We’ve got a chance to get this recovery right by keeping federal stimulus money flowing for as long as it’s needed and directing it to working people and families.”
West Virginia Governor Jim Justice said the state is processing nearly 40 times what they would normally see in unemployment applications and they are also still trying to address a backlog. In an attempt to get payments out to West Virginians sooner Justice announced people will be able to get a direct payment instead of having a debit card mailed to them.
West Virginia Center on Budget and Policy Senior Policy Analyst Sean O’Leary said the main challenge people are facing is getting their applications through the unemployment system.
“Then once they get through and get their application filed, how long does it take to be processed. Because we’re now five weeks into this and there are more unprocessed claims than there are processed claims.”
O’Leary said there are also a lot of unemployment applications that aren’t included in the Labor Department’s report. He said according to federal data since the crisis began there have been about 67,000 claims filed in West Virginia, but state data tells a different story.
“Last week we heard from the governor and the commerce department that there were probably around 131-136,000 claims filed at workforce,” he said. “So that means there’s 74,000 claims that have yet to be officially filed.”
O’Leary said before the pandemic the most unemployment claims West Virginia had seen in a single week was about 5,500.
West Virginia isn’t alone in the backlog of unemployment claims and overtaxing its unemployment system. Kentucky, Ohio and the rest of the country are seeing record-breaking levels of people filing for assistance after losing their jobs due to an economic shutdown. Still, not everyone who has lost work is eligible to file for unemployment either. People who are self-employed or who have only had their hours cut back may initially have their applications rejected.
The small glimmer of hope for those who have been waiting weeks for their claims to be processed is that assistance will be backdated and cover the time they had to wait for that financial help. But O’Leary said that doesn’t pay for groceries now or cover any bills that are past due.
“I think it’s important to remember that these big numbers are people,” he said. “These are people who are struggling. These are people who need help. And it’s important to also understand this is a completely new way that we are using the unemployment system.”