A sign informs customers of the temporary closure of Macy’s at Perimeter Center Mall in Dunwoody. Many stores in the mall, including Macy’s and Nordstrom, are closed until further notice due to COVID-19. (ALYSSA POINTER/ALYSSA.POINTER@AJC.COM)
Photo: Alyssa Pointer
Photo: Alyssa Pointer

Georgia jobless claims skyrocket on virus closings

The Georgia Labor Department said Thursday that it processed 133,820 claims for unemployment benefits last week – a stunning increase that reflects the virtual shutdown of many sectors in the state’s economy.

It was the highest number of claims ever processed in a week and was more than 10 times the previous week’s number.

The state’s grim report paralleled the nation’s numbers: 6.6 million Americans filed for unemployment benefits last week. The previous week saw 3.28 million around the country file — a record until Thursday.

The tsunami of layoffs, especially among workers in hospitality, transportation and entertainment, is the result of actions taken to try to slow the spread of the coronavirus. Restaurants have limited service; sporting events and conferences have been canceled; most travel plans have been suspended; schools, as well as many offices and businesses, are closed.

And Georgia Gov. Brian Kemp has just issued a “shelter in place” order that bans people leaving their homes other than for necessities.

Consumer spending accounts for two-thirds of the U.S. economy. However, many consumers are now shuttered in their homes, their spending confined to food, medicine and online purchases.

“People are seeing the value of what they have taken for granted,” said economist Jason Delaney at Georgia Gwinnett College. “I think that will leave a mark.”

Workers whose hours have been reduced or eliminated are eligible for jobless benefits, even if they have not been laid-off. Moreover, many self-employed and contract workers also qualify, under an emergency bill passed by Congress and signed by the president.

Unlike economic downturns of the past, this one has been so dramatic because much of it was deliberate.

“Economists study the market and this is not a market phenomenon,” said Delaney. “This is like spending your grad career studying poetry and, all of a sudden, all the rhymes stop working.”

Some of the job cuts filed with the Georgia Department of Labor include:

  • 117 positions in Atlanta at Alsco, a company that rents and cleans worker uniforms and linen.
  • 54 in Peachtree City at Wencor, which provides replacement parts and other solutions for airlines.
  • 136 at Focus Brands, which owns a number of restaurant chains, including Moe’s Southwest Grill, Schlotzsky’s, Auntie Anne’s and Carvel.

“We are seeing the number of claims filed in Georgia skyrocket to levels we have never experienced before,” said Mark Butler, the state’s labor commissioner.

The national unemployment rate, at a historic low of 3.5% in February, is due to be updated Friday. But the new rate likely will reflect only a fraction of the recent displacement, since the calculation depended on surveys taken in the middle of March, before job losses accelerated.

So far, 10 million jobs have been lost nationally, according to the U.S. Labor Department, and the crisis still unfolding.

Some economists say more than twice that number will be lost before the virus ebbs and many businesses restart.

That would mean unemployment rates in double-digits, very possibly blowing past Georgia’s all-time high of 10.6% in the aftermath of the Great Recession.

Economists have different opinions on whether the eventual recovery will be sluggish and painful or quick and robust. But no one doubts the economic damage is widespread.

“This is going to have social and psychological consequences,” said economist Delaney. “Everybody is going to feel much less secure about a job.”

Yet in some sectors, there is a demand for workers – especially in health care and personal services, as well as along the supply chain from field to warehouse to truck to the grocery store checkout.

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