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Why does Pennsylvania have so many more unemployment claims than even larger states?

Pennsylvania is on track to surpass 1 million unemployment claims in just 3 weeks. Why is it worse here than most larger states?

Ervin Johnson walks his bike across Market Street at 15th Street in Philadelphia, on the first day of the shutdown of non-essential businesses.
Ervin Johnson walks his bike across Market Street at 15th Street in Philadelphia, on the first day of the shutdown of non-essential businesses.Read moreJESSICA GRIFFIN / Staff Photographer

About 377,000 Pennsylvanians filed unemployment claims during the first week of coronavirus shutdowns, more than twice as many people as in any other state. As bad as the first week was, even more Pennsylvanians — 406,000 — filed for benefits last week.

Nationwide, initial unemployment claims soared to 6.6 million for the week ending March 28, according to data released Thursday by the U.S. Department of Labor. That marks the highest level of seasonally adjusted initial claims ever recorded by the government, breaking the record of 3.3 million set just a week earlier.

Before the world ever heard of the coronavirus, the previous high was 695,000 in October 1982, which lends some scale to the unprecedented pace of the economic paralysis triggered by the public health emergency.

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Pennsylvania had the second highest total for last week, as weekly unemployment claims in California soared to 879,000. New Jersey reported 205,515 new claims last week, up from 115,815 (a number that was adjusted down from the state’s previous report of 155,000).

Pennsylvania’s two-week total of 783,331 new claims is still the second largest number nationwide since March 14. One of the few states that reports daily tallies, Pennsylvania says 195,000 workers filed initial claims during the first four days of the reporting week, through Wednesday. It is on pace to surpass by Thursday a million new claims since the outbreak arrived.

The state’s unemployment claims from the last two weeks are higher than all of last year’s. When measured as a percentage of the workforce, almost 12% of Pennsylvania’s workforce has filed for benefits in the last two weeks, making it the hardest-hit state in the nation, according to an Inquirer analysis. (Only two other states are in double digits: Rhode Island is second at about 11.5%, and Nevada is third at 10.5%.)

Why is Pennsylvania, which is neither the most populous state nor the hardest hit yet by the pandemic, outpacing most other states?

And is joblessness really worse here? To that question, experts say: Yes. And maybe not.

Pennsylvania’s big numbers are the consequence of early and aggressive action by Gov. Tom Wolf to shut down the state’s economy to curb the spread of the virus, said Mark Zandi, chief economist at Moody’s Analytics in West Chester.

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“Gov. Wolf was early in requiring businesses to shut down, particularly here in Southeastern Pennsylvania, long before many other parts of the country began to lock down their businesses, so we were early going into this,” Zandi said.

Wolf on Wednesday extended the stay-at-home order to all 67 counties.

Wolf’s order idled most major construction sites in Pennsylvania except those involving health-care facilities, said Gene Barr, president of the Pennsylvania Chamber of Business and Industry. In other states with coronavirus lockdowns, construction has continued largely unabated, though New York state recently shut down construction.

“Pennsylvania arguably has the most restrictive provisions as it relates to businesses continuing to operate,” Barr said.

The Wolf administration has since granted waivers to some other construction projects, but the industry is largely idle. And construction workers, whose jobs are often seasonal or cyclical, typically know how to tap into the unemployment insurance system without delay, labor experts said.

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The Wolf administration acknowledged that the state’s early shutdown played a big role in boosting the tally. It also encouraged workers to file unemployment claims. More than two weeks ago, the Pennsylvania Department of Labor and Industry began temporarily waiving some requirements to speed up the filing process.

“Pennsylvania was one of the first and largest states to take action to save lives and stop the spread of COVID-19 with aggressive mitigation efforts, therefore an increase in unemployment compensation applications would be expected,” Penny Ickes, spokesperson for the Pennsylvania Department of Labor and Industry, said in an emailed response to questions.

Pennsylvania’s numbers also may have run up quickly because unemployment insurance is often a jobless worker’s first line of defense in the state. Some large states have other programs in place — mandatory paid sick leave, short-term disability, paid family and medical leave — that may kick in initially and mask the severity of job losses there.

“California, New York, and Washington all have such programs, allowing them other means of paid leave for workers who may temporarily be unable to work due to COVID-19,” Ickes said.

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Though Pennsylvania’s unemployment compensation system is choked with 25 times more applications than it received on a weekly basis in early March, and has been the subject of much criticism from frustrated workers, it did not suffer major disruptions like those reported in California and New York, economists said.

Zandi, the Moody’s economist, also said Pennsylvania’s numbers may have been boosted because its economy was particularly frail going into the coronavirus outbreak — its manufacturing, transportation, agriculture, and energy sectors had already suffered from trade war damage.

“People were on edge and probably went over the edge faster than other parts of the country just because they were already struggling,” he said.

Most experts said Pennsylvania’s quick start out of the gate was a harbinger of worse things to come as other states begin to catch up this week, and the federal numbers released Thursday seemed to bear that out. New York state, the epicenter of the COVID-19 outbreak in America, reported 366,000 new claims last week, up from 80,000 the previous week. It’s reasonable to assume New York’s numbers will eventually surpass most other states'.

The detached analysis of hard data may be little solace to individuals and small business owners who are struggling with joblessness, and have received no response from their state’s overwhelmed unemployment systems.

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Steven Mavros, an acupuncture therapist and co-founder of the Healing Arts Center in Philadelphia, was forced to largely shut down his business because its work involves close contact with patients. The acupuncturists are self-employed independent contractors, but they pay fees to the center. The loss of revenue forced Mavros to lay off six of his eight administrative employees on March 17.

“Friday was going to be payday for those people, and they were hoping to get their unemployment by then,” Mavros said. “So I’m thinking I might have to hand my staff, like, cash out of my pocket just so they have something until unemployment starts coming through.”

The employees applied for unemployment benefits by March 20, but not none of them had received a response from the state by Wednesday, Mavros said. According to Pennsylvania’s Office of Unemployment Compensation, those employees should be receiving benefits this week.

“None of them have gotten a single response,” Mavros said. “So I don’t — you know, I don’t know where to guide them or what to tell them.”

Staff writers Chris A. Williams and Dylan Purcell contributed to this article.