The Utah Department of Workforce Services released the number of unemployment claims from March 15-21, showing a 1,391% increase in the number of unemployment claims since state officials prohibited dine-in restaurant operations and limited social gatherings to 10 people.
Before this latest report, the department touted a 2.5% unemployment rate in Utah.
From March 15-21, 19,591 claims were filed, as opposed to the 1,314 claims the week before. The department has already began allocating benefits to the 11,321 unemployment insurance claimants that also filed in previous weeks, paying a total of $3,697,473 in benefits.
The industry seeing the biggest increase was food preparation and services, which made up about 37% of the filings. Other hard-hit industries include office and administrative support at 9.3% and management at 8.6%.
Utah County residents made up 12.4% of the individuals who filed claims, with the highest number of claims coming from Salt Lake County residents, who made up 47% of those filing unemployment claims. Davis (7.1%), Washington (6.2%) and Weber (6.2%) counties rounded out the list of five counties with the largest percentage of claims, each falling below 10%.
The U.S. Department of Labor also saw a noticeable increase in unemployment insurance claims, which it reported rose by 3,001,000 from March 15-21. The week prior, claims showed an increase of 101,000 ending on March 14, with the previous record being a 695,000 weekly increase set in 1982.
While the department saw a steep increase in the number of unemployment claims, 1,508 people ended their unemployment claims on March 14, illustrating the number of people who are no longer accessing benefits.
“Clearly, the volume of claims has increased significantly, and also quickly,” said Kevin Burt, Unemployment Insurance Division director. “The Unemployment Insurance Division staff are working diligently to try to meet this high demand, understanding the significance of this benefit to those that are applying. It is important to note that many of the new claimants are still connected with their employer and expect to return with increased economic activity.”
Right now, he said, employers are expecting people to return to work once economic activity resumes. In these instances, employees can apply for unemployment and receive benefits without being required to look for a new job. This provides the employees with replacement wages and allows businesses to retain employees once economic activity resumes.
If public orders are extended and the business were to go under, Burt said the department would work with the individuals impacted by the closure to find a new job. Each resident is eligible for up to 26 weeks of unemployment.
Unemployment claims are intended to help individuals who find themselves in a situation where they can’t afford to provide for themselves, to replace some of the lost wages in the event of a layoff or if they are unable to find a new job.
“Last week we were able to put $3,697,473 of wages into the economy,” Burt said. “If unemployment weren’t available, that income would be lost and it would be a multiplier.”
Residents working with little to no income have difficulty meeting their needs, which creates a ripple effect that affects other companies and small businesses which aren’t seeing sustainable revenue. Unemployment benefits return purchasing power to individuals.
Burt said he isn’t sure this historic change is indicative of a recession. In a recession, he said, unemployment claims increase gradually, which is not what the department is seeing today. The almost 1,400% increase is more similar to what the department experiences during a government shutdown.
In a government shutdown, unemployment is immediate, not gradual, he said, and is often fixed almost immediately as federal employees return to work as soon as the shutdown is over. However, in these instances, only federal employees are impacted.
The most recent reported numbers are unprecedented, Burt said, because it is not only federal employees that are being affected but rather employees from across all private and public sectors.
“The only thing that is yet to be determined is how long this pandemic will last and how fast activity will continue,” Burt said.
Residents will not be able to see how this unprecedented increase has affected the overall state unemployment rate until monthly reports are released in the coming weeks, Burt said, but the weekly reports are the fastest measure for current economic activity.
The Department of Workforce Services created a web page specifically for residents whose employment has been impacted by COVID-19. The page answers frequently asked questions while also offering twice-a-day workshops to help residents learn how to apply for unemployment benefits, understand what temporary financial assistance may be available, and acquire tips for getting a new job.
“We’ve tried our best to ensure people know what benefits are available, and clearly they’re seeking it,” Burt said. “This demand is unprecedented, and some of our service levels have suffered. The best thing people can do to help is apply online, make sure the application is complete, and have some patience.”
Unemployment benefits applications can be found online at https://jobs.utah.gov.