The economic bleeding from the coronavirus pandemic is already well underway in Pennsylvania. And it’s going to get worse before it gets better.
More than a whopping half a million Pennsylvanians have filed new unemployment claims during the last week, according to a state senator briefed by the Department of Labor and Industry. The 540,000 new unemployment claims — filed between March 16, when Gov. Tom Wolf first announced the closure of all nonessential businesses, and Tuesday — are a record number, and demonstrate the sweeping economic fallout from efforts to slow the coronavirus.
Many of those who filed are low-wage workers. They are hotel housekeepers, baggage handlers, cashiers — workers already in precarious positions, facing unpredictable schedules, unaffordable health care, and no access to paid sick leave. And then there are workers who aren’t even reflected in the department’s count because they aren’t eligible for unemployment insurance: undocumented workers, gig workers, and workers who get paid in cash.
“It’s a stunning number,” said Rob Wonderling, president and CEO of the Chamber of Commerce for Greater Philadelphia.
Previously, the highest number of first-time claims filed in a week in Pennsylvania since at least 1987 was 61,181, in early 2010, according to federal labor statistics. The monthly total that year also set the previous record, topping out at 168,159.
The job losses from the coronavirus will far exceed those numbers.
“You are going to have more and more people laid off,” said State Sen. Christine Tartaglione (D., Philadelphia), the minority chair of the Senate committee on labor and industry. “There are going to be a lot more.”
The Department of Labor and Industry declined to comment ahead of its expected release of official numbers Thursday. That data will cover Monday through Friday of last week, so it will differ from the 540,000 figure, which included the beginning of this week. Roughly 50,000 to 90,000 claims have been filed each day since Wolf ordered nonessential businesses to shut down last week. Lawmakers said the flood of unemployment claims is expected to continue as more counties implement stay-at-home measures.
The fallout continued Wednesday, with 14 employers notifying the state of layoffs, far more than usual. Most were hotels, but they also included movie theaters, trucking terminals, and the swanky new Fitler Club in Center City.
“Even this week’s number won’t be as bad as next week’s,” said Diane Lim, an economist and senior adviser for the Penn Wharton Budget Model.
Labor leaders have been fighting to get their laid-off workers included in relief efforts, while business leaders are trying to navigate the line between protecting public health and keeping the state’s economy afloat. All agree they’ve never seen such an economic collapse — not during the Great Recession, not after the Sept. 11, 2001, terrorist attacks.
Sweet compared it to a natural disaster such as Hurricane Katrina — but on a much larger scale.
“The U.S. economy doesn’t turn on a dime,” said Ryan Sweet, director of Realtime Economics at Moody’s Analytics. “It did this time. It’s a complete stoppage.”
The hardest-hit industries, he said, include leisure, hospitality, tourism, and transportation.
“The sheer sudden stop in many parts of the country is something I’ve never seen before,” Sweet said.
There were 1,127 confirmed cases of the coronavirus in Pennsylvania as of Wednesday afternoon, compared with 153 just one week ago; 11 people had died. One of the only economic hopes Wednesday was that the state may have taken strict measures early enough to minimize the spread of the virus and eventually rebound.
“All the states that have initiated shutdowns will be in a similar boat,” said Tom Jackson, a Philadelphia-based regional economist at IHS Markit, an international business consulting firm headquartered in London. “The good thing for Pennsylvania, looking forward, if you keep the number of cases low, that can help get you back to work a little quicker and get you feeling confident that the shutdown worked and people feel safe.”
Lim noted that Pennsylvania has about 7% of its workforce employed in the leisure and hospitality sectors, compared to about 21% in Nevada.
“Pennsylvania is in pretty good shape compared to other states,” she said.
(On the other hand, almost half of Philadelphia’s workforce is made up of low-wage service workers, many of whom work in the retail and hospitality industry.)
And congressional leaders were finalizing a deal late Wednesday on a $2 trillion rescue package that would include direct payments to individuals and families, money for state governments and hospitals grappling with soaring caseloads, and aid to keep businesses afloat while most economic activity is frozen. Pennsylvania could receive about $5 billion in aid from the bill, U.S. Senator Pat Toomey (R., Pa.) said Wednesday.
Gene Barr, president and CEO of the Pennsylvania Chamber of Commerce, said he was working to figure out how to “balance health effects and economic effects.” He believes many businesses can practice social distancing while staying open, including those in the building industry.
“My concern is that if those jobs go away, they might never come back,” he said.
Gabe Morgan, vice president of 32BJ SEIU, said he was relieved to see money set aside in the congressional rescue package for airline subcontractors, whom his union represents nationwide. His union, as well as mayors from across the country including Mayor Jim Kenney, had urged Congress to include subcontractors in any airline industry relief package.
In Philadelphia, hundreds of airline subcontractors — baggage handlers, wheelchair attendants, and cabin cleaners — have already been laid off.
“If you think about it from a city level, half the workers at airports are contracted workers,” Morgan said. “You don’t want to ignore half the jobs.”
The Philadelphia Inquirer is one of more than 20 news organizations producing Broke in Philly, a collaborative reporting project on solutions to poverty and the city’s push toward economic justice. See all of our reporting at brokeinphilly.org.