New unemployment claims in Washington state fell for the sixth consecutive week and hiring has picked up in some sectors. But experts warned that a sustainable recovery from the COVID-19 recession may not emerge anytime soon.
Workers in Washington filed 18,389 new, or initial, claims for regular unemployment insurance during the week ending Aug. 22, the state Employment Security Department (ESD) reported Thursday. That’s down 16.2% from the prior week and 36% from a month ago.
Nationally, initial unemployment claims fell nearly 9% last week, to 1 million, the U.S. Labor Department reported.
Still, new unemployment claims in Washington state are nearly four times the level they were a year ago, as some companies continue to make cutbacks.
And although the total number of workers receiving jobless benefits in Washington fell modestly — to 356,587, or 1.6% lower than the prior week — it’s also at historic levels. Many of those collecting benefits are workers who lost their jobs during the first big pandemic-related layoffs in March and April.
“The tapering off in recent weeks tells me that we are no longer in the first phase of the crisis, but that many people are still being laid off,” said Anneliese Vance-Sherman, regional labor economist at the ESD who covers part of the Seattle area. “The sustained high number of continued claims tells me that a large number of people have yet to return to work … We are still in a precarious situation.”
As of July, 408,000 of the state’s 3.97 million-person workforce was unemployed, according to the ESD’s latest monthly data, which put the state’s seasonally adjusted unemployment rate at 10.3%, or just barely above the national rate of 10.2%.
Until recently, much of the economic pain from pandemic layoffs has been blunted by emergency federal unemployment benefits, notably a $600 weekly payment on top of regular state benefits. Since the week ending March 7, Washington has paid out more than $10.1 billion in benefits, with most of that coming from the federal government.
But the $600 benefit expired in July, and Congress has yet to extend it.
Washington state was recently approved for a federal program that could temporarily replace some of that $600 benefit with a smaller payment.
On Monday, the state received approval for the federal Lost Wages Assistance program, a short-term measure that could mean an extra $300 a week for people who have become unemployed or partially unemployed because of the pandemic and who are already receiving unemployment benefits.
Under the current program, that benefit would last only three weeks. States can apply for additional weeks of funding, but it’s unclear how many more weeks would be available, ESD spokesman Nick Demerice said.
That’s because the program contains limited funds — $44 billion — and must also be used to pay for federal emergency responses. “So impacts from wildfires or hurricanes or other things could cause the program” to hit its spending limits sooner, Demerice said.
Amid the continuing uncertainties in the state job market, however, there were signs that hiring was picking up in some sectors.
An ESD report that compares unemployment claims to new jobs postings showed that demand for workers statewide increased nearly 10% in July.
Demand was especially strong in some sectors that were hard-hit early in the pandemic, including health care support (16%), sales (21%) and food service (29%).
Among those looking for workers is Careforce, a Lynnwood-based company that provides in-home nursing and care services in the greater Seattle area.
The company wants to expand its 120-person staff to take advantage of a boom in demand for in-home care as patients concerned about “highly transmittable diseases” have sought alternatives to institutional health care facilities, said Geoff Meinken, Careforce CEO. Meinken reckons Careforce has seen demand for in-home services grow by 50% during the pandemic. “There are more clients out there for us,” he said.
But even where demand for workers has returned, the pandemic can complicate hiring. Employers in some sectors are having trouble attracting workers for jobs that are perceived as higher risk for COVID-19, according to some media reports.
That was especially the case for lower-wage jobs, such as in the restaurant sector.
“This is the most dramatic shift that’s happened in the modern history of food service,” Aaron Allen, chief strategist at restaurant consultancy Aaron Allen & Associates, told Bloomberg. “It’s the first time people have left the industry and decided not to come back.”
Vance-Sherman, the ESD economist, said some of that shift may be temporary, as workers who were laid off from potentially risky jobs weigh the costs and benefits of returning to work after unemployment benefits have been reduced but before the pandemic is over.
“Each person is making the calculation of health risk and wages,” she said. “People who can hold out hope for a better job on the other side will try to do so.”
For many, the decision will come down to a simple question: “Is the health risk worth a low-wage job?”