After thousands suddenly lost their jobs in early spring, employment in Skagit County is increasing, but experts caution the situation is precarious as rising numbers of COVID-19 cases could bring new restrictions and shutdowns, and school closures and a child care shortage complicate returning to work.
Today is the last day for supplemental unemployment benefits under the CARES Act, the federal relief package that has provided an extra $600 a week to millions who have been laid off or are working reduced hours. The last $600 payment will be made for the workweek that ends today.
Congress is negotiating the latest round of COVID-19 relief.
More than 3,400 people in Skagit County filed first-time unemployment claims the fourth week of March, a 96% increase in claims from the beginning of the month, according to data from the state Employment Security Department (ESD). In the second week of April, 9,714 filed continued claims.
The county’s unemployment rate reached 19.1% in April, and dropped to 11.3% in June.
While the economic situation has improved, unemployment remains high, with 460 filing first-time claims and 5,174 submitting continued claims for the week of July 12-18, according to ESD data. The numbers do not include claims from self-employed workers or independent contractors filing under a new federal unemployment program.
Anneliese Vance-Sherman, a regional labor economist for the state Employment Security Department, said the expiration of benefits will reduce the incomes of many families who have relied on unemployment insurance to stay afloat.
“This will show up in a variety of ways that could include reduced consumer spending, increased reliance on food banks and missed payments,” she said.
Vance-Sherman said while unemployment benefits are intended to replace a portion of lost wages, the supplemental $600 a week has meant some lower-wage workers are earning more than they previously had.
“A reduction in or elimination of the supplemental benefit may incentivize some workers to return to work (in instances where there is a job to return to — a big assumption in its own right),” she wrote in an email.
Skagit County gained 2,000 jobs from May to June, after losing 7,300 jobs from March to April. The largest gains were in retail, and leisure and hospitality. These sectors include restaurants, bars and hotels, Vance-Sherman said.
Every major industry showed gains from May to June, she said, reflecting economic reopening and businesses adjusting to a new normal.
Despite recent gains, jobs in leisure and hospitality have taken a big hit this year, showing a 44% decline from 2019.
“This collection of industries is still in an extremely precarious position, and will continue to face challenges moving forward,” Vance-Sherman said.
While retail jobs have increased this year, the gains are specific to retail deemed essential such as grocery stores, and building material and garden supply stores, she said.
John Sternlicht, CEO of the Economic Development Alliance of Skagit County, said while employment in some industries has rebounded, some workers may not be able to return to their jobs if they have compromised immune systems or out of concern for a family member’s health.
He said in Skagit County, where many spend more than 30% of their income on housing, the $600 weekly boost has helped them afford rent. And the money helps boost the local economy when workers spend it at local shops and restaurants.
Another issue for the economy is child care.
Sternlicht said more working parents are in need of child care because of school closures and the cancellations of summer camps and other activities, yet some child care centers are not operating due to COVID-19. Even before the pandemic, child care was in short supply and not affordable for many families.
Vance-Sherman said the decisions to be made by school districts on remote versus in-person learning in the fall will play a factor in whether parents return to work.
While jobs are returning, some businesses have not rehired their full staffs because of the financial challenges of operating at reduced capacity.
Tony White, general manager of the Skagit Valley Food Co-op, said the co-op has brought back all the store’s employees it had laid off at the start of the pandemic, but not the 10 waitstaff at the co-op’s restaurant, Third Street Café, which is offering only takeout.
“It’s already hard enough to make money at a restaurant with full operations,” he said. “At half capacity, you still need the same number of (employees). It just doesn’t make sense (to open.) And we are also worried about opening back up and closing back down.”
Gov. Jay Inslee announced Thursday additional restrictions on businesses to slow the rising number of COVID-19 cases. Starting next Thursday, bars must close for indoor service, and in restaurants only those who live in the same household can dine together indoors. Fitness centers and pools must limit occupancy to five individuals, not including staff, at a time.
Vance-Sherman said COVID-19 inspired regulations on businesses are in large part responsible for putting people out of work, but a community’s perception of risk also plays a role.
“If we see a spike in COVID-19, and worsening conditions that point to severe constraints on medical resources (e.g. hospital beds), we could see a revisited spike in unemployment because of regulatory tightening, but also because individuals and families may retreat to their homes to reduce risk of exposure,” she said.
Sternlicht said compliance with health mandates such as wearing face coverings and practicing social distancing will help businesses and the economy to remain open.