By Angela Couloumbis of Spotlight PA and Wendy Ruderman and Dylan Purcell of the Philadelphia Inquirer | Spotlight PA
The wave of business closings and cancellations amid the coronavirus crisis are causing massive job losses and a sharp spike in claims for unemployment compensation in Pennsylvania.
In the last two days, as the coronavirus’ spread led Pennsylvania Gov. Tom Wolf to order a statewide shutdown, state officials have received 120,000 claims for unemployment benefits — more than half of what the state reported for the entire first quarter of 2019, according to state and federal data.
State labor and industry officials said 50,000 people filed for benefits on Monday, the day the governor extended his shutdown order for nonessential businesses to all 67 counties. By Tuesday, another 70,000 people had submitted claims.
John Dodd, director of the Philadelphia Unemployment Project, a seven-person nonprofit, said he is concerned about whether the state will be able to handle the influx of new applications.
“Unless they’re gearing up tremendously, which they should, they’re going to have a terrible problem,” he said.
Pennsylvania officials could not immediately provide a breakdown of where the job losses have occurred.
State labor officials did not respond to questions about whether they were beefing up staffing levels to process the new claims, or how long they believed it would take to let people know about qualifying for benefits. Earlier in the week, the Wolf administration said it was eliminating the usual one-week waiting period to receive benefits.
Labor officials, however, urged residents to apply online, saying it will greatly speed up the process.
The jobs crash caused by the impact of the coronavirus has been hard and swift: Before the public health emergency, Pennsylvania’s unemployment rate was 4.7 percent in January.
Wolf’s statewide shutdown order went into effect at 12:01 a.m. Tuesday and will last for two weeks. It applies to all nonessential businesses such as hair and nail salons, gyms, retail malls and stores, movie theaters, concert halls, and other entertainment venues. The governor also shut down schools statewide.
Businesses leaders said the travel and hospitality industries have been hit the hardest during the first few days of the shutdown. State labor data shows those industries also employ the most people.
The “Health Care and Social Assistance” industry topped the list, with an average of 1,092,125 workers between July and September of 2019, followed by the retail, manufacturing, and “accommodation and food services” sectors.
Bars and other food service businesses employ 420,000 workers statewide, with 55,185 people working for more than 4,500 bars and restaurants in Philadelphia alone, the data show.
Gene Barr, the president of the Pennsylvania Chamber of Business and Industry, put it this way when asked about the crisis’ impact on workers and the potential for more job losses: “We are in a situation we have never encountered before. It’s a playbook we are writing as we go.”
Pennsylvania’s unemployment compensation fund started the year with a $3.4 billion balance, according to the U.S. Department of Labor.
It is unclear how long the funds’ balances will last, given the crush of applications for unemployment benefits. Barr noted that Pennsylvania just this January paid off the last of the $2.8 billion in bonds it issued in 2012 to retire a post-recession unemployment compensation debt that businesses owed to the federal government.
On Wednesday, the state’s Commonwealth Financing Authority, which administers tax credit grants and financial incentive programs, authorized sending $40 million to the Pennsylvania Industrial Development Authority to provide zero-interest loans to small businesses.
Under the program, loans of up to $100,000 will be available for small businesses to use as working capital. Though details are still being ironed out, state officials said there will be no application fees, and businesses will not have to make payments during the first year of the loan.
Inquirer staff writer Andy Maykuth contributed to this story.
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