Jobless picture remains murky in Arizona The Mesa Tribune | The Hometown Newspaper for the city of Mesa, AZ

Jobless picture remains murky in Arizona

Jobless picture remains murky in Arizona
Business
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By Howard Fischer
Capitol Media Services

Arizona employers are continuing to lay off workers even with the end of restrictions Gov. Doug Ducey had placed on individuals and businesses.

Figures last week from the Department of Economic Security show that 23,037 individuals filed for first-time jobless benefits in the first week of June.

That is a sharp decline from what happened to the Arizona economy after Ducey ordered the closure of nonessential businesses – leading to claims for basic state unemployment benefits, which previously had been running in the 3,500-a-week range, ballooning past 132,000.

But economist George Hammond said the state is far from being out of the fiscal woods.

He told Capitol Media Services that some sectors of the economy, like bars and restaurants, are finding they really can’t return to pre-pandemic business levels because of “social distancing” restrictions.

At the same time, many Arizonans are not confident about the safety of going back out, at least not yet.

Hammond said that will lead to new layoffs as well as some people who had only been furloughed realizing that they’re not going to be called back and deciding they need unemployment benefits.

The new report on first-time jobless claims, directly linked to the pandemic and the governor’s subsequent orders, shows the trends are less clear.

DES reported the number actually increased from the prior week. But the figures are complicated by questions about how the agency tracks the applications.

Since the governor put his orders in place, the agency lists nearly 650,000 Arizonans who have sought basic state benefits to those who lose work through no fault of their own. They’re entitled to half of what they were making, subject to a cap of $240 a week, the second lowest in the country.

But DES officials say there could be some duplication in those numbers.

For example, some companies are furloughing workers one week out of every month. Agency spokesman Brett Bezio said the question of how they are counted depends on whether they simply reopen existing claims every four weeks or file new ones.

Then there’s the separate Pandemic Unemployment Assistance program, which provides up to $600 a week for those who are not eligible for regular state unemployment benefits, including self-employed and workers in the “gig” economy like drivers for Lyft and Uber who those companies classify as contractors.

DES reports there were 96,416 initial claims this past week for this coverage, bringing the total number of claims to nearly 295,000.

But here, too, Bezio said the agency cannot say how many of these people applied initially for regular jobless benefits – and are included in those numbers – before seeking PUA when they were determined ineligible, versus those who applied solely for PUA benefits.

But the bottom line remains that, whatever the counting methodology, Arizonans are continuing to apply for aid.

Hammond, the director of the Economic and Business Research Center at the University of Arizona’s Eller College of Management, said the numbers reflect the diversity of the state economy and the fact that not all sectors are recovering at the same rate.

He cited restaurants and bars, now allowed to open – but with limits on the number of patrons.

“It’s hard to see them being able to recall the workers who were laid off,” he said. “So there are some people who maybe thought they were going to get recalled maybe giving up and filing.”

And Hammond said some restaurants that had brought back workers may be finding that business is not what they expected, leading to new layoffs – and new claims for unemployment benefits.

Conversely, he expects strong recovery in the health care industry.

There had been some lags there when the governor declared a ban on non-essential surgery and medical procedures in a bid to ensure there were not just enough hospital beds but also protective equipment like gowns, masks and gloves. Ducey has since told medical providers they are free to resume elective surgeries.

And everyone else?

“In other sectors, where the fear isn’t so great, they’re going to rehire,” Hammond said. “We’re going to see the layoffs gradually drift down.”

That, in turn, goes to the part of the problem unrelated to gubernatorial directives: Consumer confidence.

“Once the stay-at-home orders and restrictions are eased, it’s really going to depend on how safe people feel,” Hammond said.

“That’s really the million-dollar — or billion-dollar question,” he continued. “How safe will people feel going back into restaurants, bars, hotels, motels, sporting events once those start back up?”

And there’s another side to that.

“How safe do employees feel going back to work and dealing with people?” Hammond asked.

There are some indications that Arizonans are beginning to feel more comfortable with going out.

OpenTable, which helps people book reservations online, reports that dine-in seating at Arizona restaurants on Monday was down just 37.4 percent from the same period a year earlier. Just a week earlier the figure was a 60 percent year-over-year drop.

By contrast, OpenTable reports seated dinners from online, phone and walk-in reservations in California are still almost 79 percent less than last year. And in New Mexico the decline is nearly 70 percent. 

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