Tri-Cities job losses expected to continue as counties stay in Phase 1

Employment across Washington took an unexpected turn in May in the face of a lingering pandemic, with 52,000 jobs being added statewide.

“Things are changing, but there are so many businesses that still are hiring that it is encouraging that this recession may be short term rather than long term,” said Asja Suljic, a regional labor economist with the department based in Tri-Cities.

For the week ending June 13, 49 fewer people in Benton County filed first-time jobless claims than the week before for a total of 790 claims.

The food services industry had the highest number of claims, followed by specialty trades like plumbers and painters and food manufacturing.

Franklin County had an increase with 422 people filing their first jobless claims, which was 66 more claims compared to a week earlier. Food manufacturing had the highest number claims, followed by social assistance and food/drink jobs.

The largest gain on jobs across that state was construction with 30,000 jobs being added. Specialty trade accounted for the bulk. New construction is allowed in Phase 2 of the Washington’s Safe Start phased opening plan. Only three counties — Benton, Franklin and Yakima - remain in Phase 1.

Leisure and hospitality added 22,600 jobs with nearly 17,000 of those falling into the categories of food services and drinking places, which also are allowed to reopen with restrictions under Phase 2.

Statewide, the Employment Security Department reported that unemployment rate dropped to 15.1 percent in May from 16.3 percent in April.

Monthly unemployment numbers at a county level won’t be released until this week, but the state numbers are encouraging, Suljic said.

Not in the clear

However, the drop is only a glimpse at recovery because the unemployment rates have been staggering since restrictions over COVID-19 took effect.

“While the unemployment rate in Washington fell in May, it remained historically high as the state continued to navigate the economic fallout from the COVID-19 crisis,” said Paul Turek, economist for the department.

“Over the past month, a small portion of the jobs lost during the first two months of the pandemic were recovered as the economy begins to re-open across the state,” he said.

Unemployment and jobless data will probably continue to bounce around quite a bit, said Hart Hodges, co-director at the Center for Economic and Business Research at Western Washington University. It will be volatile because the economic collapse was swift and various rescue programs will impact the data in different ways.

For example, some companies have kept their paying workers with the federal Paycheck Protection Program. Many of the businesses involved in that program had eight-week loans.

With those loans expiring, some companies are still unable to rehire all their workers due to capacity restrictions in early reopening phases, leading to layoffs. The timing of the loans, how fast a business can reopen and how many employees are needed are some of the factors creating labor force volatility, Hodges wrote in an email.

In Benton and Franklin counties, Suljic said, “I expect job losses in May because we aren’t fully open yet. It is July where I would expect to start seeing a growth in certain industries.”

She worries that the length the Tri-Cities have remained in Phase 1 may cause some small businesses to close permanently.

“Our biggest concern is if they don’t open up by mid-July, the overhead costs for all the small businesses might be too much to bear unless they got a grant or loan support.”

The state paused consideration of the applications Benton and Franklin counties filed last week, in part, because of a spike in COVID-19 cases.

The Washington state Department of Health announced the status Tuesday morning after a series of meetings between state and local officials in recent days.

State health officials said at meetings last week that the Tri-Cities needs to be doing more to limit the spread of the coronavirus, including better compliance with orders for people to wear masks in public.

Job losses

Across the state, the manufacturing industry had the largest number of job losses across the state, with 3,671 new claims.

That’s followed by the health care industry (3,583 new claims) and food services (3,240 new claims). The health industry includes a wide range of jobs beyond hospital workers, including dentists and chiropractors.

Suljic said that the industries expected to have the fastest recovery are health care, construction and the food industry.

The limits on large gatherings, it is expected that leisure and hospitality industry, i.e., hotels, will have the hardest time coming back from the long closures.

This story was originally published June 21, 2020 at 3:14 PM.