State and local unemployment peaks will be reflected in data released later this month, but experts say those numbers will not represent all workers affected by COVID-19.
Southwestern Pennsylvania is expected to hit a recession even as COVID-19 restrictions ease and residents return to work, but it’s still unclear how long the economic hardship will persist.
Since mid-March, 1.7 million furloughed or laid off Pennsylvanians have filed unemployment compensation claims amid economic shutdowns, business closures and stay-at-home orders. This kind of pivot from record-low unemployment is unprecedented, economists say, as is the nature of this recession.
State and local unemployment peaks will likely be reflected in April data released later this month, but experts say those numbers will not represent all workers affected by COVID-19.
Analysts with financial planning website MoneyGeek estimated 31 percent of Pittsburgh workers, or 375,000, have experienced temporary or permanent job loss related to the economic shutdown. The official unemployment rate, though, will likely be much lower, according to Chris Briem with the University of Pittsburgh’s Center for Social and Urban Research.
“A lot of folks are dropping out of the labor force, and there are those who would be moving into the labor force who are choosing not to because the situation is so bleak at the moment,” he said.
While it’s possible 20 to 40 percent of local jobs have been temporarily affected by the shutdown, not all of those workers need or have filed for unemployment.
“I had a similar estimate that the initial shutdown order impacted about 40 percent of local jobs,” he said. “That does not always mean out of work. Some are paid and at home, but the question is how many.”
Briem expects an official unemployment peak closer to 16 percent in the region, “but there are a lot of unknowns.”
The Pennsylvania Department of Labor and Industry last month released results from its March unemployment and jobs surveys collected from March 8 to 14 — before many coronavirus-related business and school closures were implemented in the second half of the month. The state’s rate increased just 1.3 percentage points in March to 6 percent.
The next report, released in May, will likely reflect peak unemployment numbers as Gov. Tom Wolf begins a phased reopening of the state in the following months.
“Once things open up, a large portion of jobs will come back,” Briem said. “We still might be in a recession when we’re done with it, but this situation is very unique.”
Beaver County’s unemployment rate peaked in January 1983 at 28 percent, but those jobs never returned and workers fled the region en mass. Even if local rates surpass that record now, it will be short-lived.
“It’s not an easy comparison,” he said. “The question is how quickly we snap back into a higher, but normal, rate. I suspect we will fall below 10 percent fairly quickly. We will be in a recession even after the immediate return, but hopefully it is more run-of-the-mill.”
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April data to reflect region's peak unemployment rate - Ellwood City Ledger
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