A lone security guard stood watch outside the closed Georgia Department of Labor on Thursday, March 26, 2020, in Marietta. A notice posted in the window advised GDOL was temporarily closing its career centers to the public. Please visit www.gdol.ga.gov for access to online resources.
Photo: Curtis Compton, ccompton@ajc.com
Photo: Curtis Compton, ccompton@ajc.com

Georgia’s ballooning jobless claims outpace U.S. amid pandemic fallout

Editor’s note: This article has been updated throughout with additional details and economists’ comments.

Georgia’s Department of Labor has processed jobless claims for nearly one in three workers since mid-March, a far-higher rate than the U.S. average, as the coronavirus hammers the state’s economy.

The state agency said Thursday it processed 228,352 claims for benefits last week, bringing the total to 1.6 million over the past seven weeks, or 31% of Georgia’s workforce.

By comparison, 33.5 million Americans filed claims over the same time, representing just 21% of the nation’s workforce.

Only Kentucky and Hawaii have had a higher percentage of workers filing claims, according to economist Gerald Cohen, who publishes the Blue Chip Economic Indicators, a monthly report from Wolters Kluwer.

Georgia is definitely one of the states that is really an outlier,” he said.

Georgia’s labor department said it didn’t know why the state and national numbers are so far apart. Economists have several theories for the divergence, but no single explanation.

It could be partly a timing issue, with Georgia processing claims more quickly than other states, even as many unemployed here are still waiting for benefits to arrive while the state agency struggles to keep up with claims.

The state has greater-than-average numbers of workers in food and accommodation, retail and wholesale trade and in the corporate sector, said economist Roger Tutterow of Kennesaw State University. “It’s got to be the industry mix. But having said, that, I’m not convinced that accounts for all of it.”

Economist Tom Smith of Emory University’s Goizueta Business School said that three-quarters of Georgians work for companies of 10 employees or fewer. “They are at the forward edge of this and they are very susceptible to the disruption.”

Those small firms often rise and fall with the fate of big ones, like Atlanta-based Delta Air Lines, which has suffered from the plunge in travel. Moreover, thousands of Delta workers have taken unpaid leave. That doesn’t count contractors and concessionaires at Hartsfield-Jackson, normally the world’s busiest airport, which has almost become a ghost town.

Mike Wald, former senior economist at the U.S. labor department, wrote in an email that the rapidity of the layoffs were partly the result of Georgia’s non-union environment.

“Georgia is a strong employment-at-will state with few job protections. Employers know they can quickly lay off workers with few recriminations (such as job actions, lawsuits, investigations by the state labor department, etc.), and know they can just as quickly rehire them when business returns.

“Quick to hire - quick to fire. I think this is an understood relationship by both employers and workers in this state.”

Wald also flagged the tens of thousands of Georgians in the health sector that have applied for jobless benefits. “I think that means health care workers not directly involved in the pandemic activities are being let go at a high rate.”

During the past seven weeks, five sectors have accounted for most of Georgia’s initial claims, according to the state’s labor department:

— Accommodation and Food Services, 446,437

— Retail Trade, 182,663

— Administrative and Support Services, 130,039

— Manufacturing, 122,772

— Health Care and Social Assistance, 83,328

The job cuts were triggered by dramatic efforts to slow the spread of the coronavirus, a campaign that abruptly closed restaurants and bars, canceled events, conferences and business travel and exiled many workers to home offices and dining rooms.

That meant sudden layoffs followed by waves of other cuts and furloughs among many service businesses.

And while Gov. Brian Kemp has lifted shelter at home orders and eased restrictions on many kinds of businesses, the policy shifts came at the end of April. Some businesses were quick to reopen, but some have said they are not rushing into it.

If the policy changes are going to make a difference in the job market, it was not visible in the claims report issued Thursday, but it might make a dent in the numbers reported next week.

“The consensus view is that it’s not going to get worse, but we are going to have a slow recovery,” said Cohen.

Of the claims received in Georgia since the crisis began, 778,330 of those have been judged valid, according to Mark Butler, the state’s labor commissioner. Workers whose initial claims were rejected can appeal.

And while the crush of applications means tens of thousands of Georgians are still waiting, more than half a million people have started receiving payments, Butler said during a teleconference with reporters Thursday.

The DOL has paid more than $1.7 billion in state and federal benefits, he added.

The department was staffed for historically low unemployment levels, so the crisis swamped its staff. While the DOL has made headway in processing applications, Butler acknowledged that it was still behind.

Improvements in technology have automated some of the process, while the department has brought back retirees and some former employees who were working elsewhere in state government, he said.

But many people have problems with their applications and cannot get through to ask for help. Sometimes a Social Security number is mistyped, sometimes a former employer has misspelled a name. Sometimes an applicant has accidentally frozen his or her account with the DOL.

Those people need to speak with someone at the department, which can be a challenge, Butler said.

“Call volume is still very high and it doesn’t take that many people to jam up the phone lines,” he said. “The biggest issue we are having is a lot of people are calling unnecessarily.”

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