BusinessCoronavirusFeaturedNewsPoliticsThe SouthSider

Coronavirus erases 20 years of Missouri workforce growth

When the COVID-19 pandemic hit Missouri, Craig Bergthold and Mark Swearingen were employed removing old fixtures and signs from commercial buildings.

“We would go in and strip the store down and then the new store will go in and put their badging on it,” Bergthold explained as they leaned against the aging Lincoln they drove to pick up groceries at Central Pantry in Columbia.

Neither was exactly sure when they applied for unemployment. But they know they aren’t getting it now. Bergthold and Swearingen are among the almost 100,000 Missourians who have exhausted their benefits.

“We’ve worked a little bit since then, but nothing substantial,” Bergthold said.

That includes cutting firewood, and Bergthold does mechanical work. He says he hates it, but it brings in cash.

A patron awaits her turn Dec. 2, 2020, at the Central Pantry in Columbia, Mo. Visitors to the pantry are given a number, with six families allowed inside at a time. Photo courtesy Rudi Keller/Missouri Independent

They visit the pantry, operated by the Food Bank for Central and Northeast Missouri, once a month, they said. They were 35th and 36th in line but didn’t mind the wait.

“I am just grateful for all the help I get,” Bergthold said.

The first surge of Missouri job losses associated with the pandemic was in the second week of March, when Gov. Mike Parson declared a state emergency and 42,246 Missourians applied for unemployment benefits. 

The jobs report for March showed an increase in the unemployment rate, to 3.9 percent from 3.5 percent. That same report also showed a record workforce of 3.15 million and record total employment at 3.02 million.

Job losses peaked at 325,000 in May, when unemployment was just over 10 percent. 

The most recent report, for October, showed Missouri had regained 127,000 jobs.

But more Missourians have left the workforce than returned to work. 

The October report showed the state workforce shrank by 160,000 in six months, to 2.98 million, the smallest since October 2000. Total employment, 2.85 million, is the lowest it has been since May 2014 except for April, May and June of this year.

“Why has the labor force declined so significantly in Missouri and many other states?  Discouraged workers,” said Ernie Goss, an economist with Creighton University in Omaha who prepares the monthly Mid-America Business Conditions Index.

The workforce, and the number of people employed, fell in September and October, indicating continued weakness in the job market. The 10,537 new claims for unemployment filed last week is 17 percent above the recent weekly average.

During the first 10 weeks of the year, claims averaged 4,600 a week. In the most recent 10 weeks, the average is almost 9,000.

The employment data shows some recovery from earlier in the year, but regaining all the jobs will be a long-term issue, Goss said 

“Looking at the national numbers versus the regional numbers, it is clear our data suggests that the rapid V shaped recovery is more of a Nike swoosh,” Goss said.

Goss’ monthly survey covers nine midwestern and Great Plains states, including Missouri. Among the states are North Dakota, South Dakota, Minnesota and Nebraska, all in the top 10 nationally for new COVID-19 infections since Nov. 1. 

Missouri is 21st nationally for new infections since the beginning of November.

Business confidence plummeted sharply in the region in November to a neutral 50 from 70.2 the previous month.

“A sharp upturn in COVID-19 infections, along with more economic lockdowns, weighted on November’s economic outlook,” Goss said.

Unemployment insurance

When Congress passed the $2.2 trillion CARES Act in March to alleviate economic disruption due to COVID-19, it included a $600 per week supplement to regular state unemployment benefits.

The rationale was that, with massive job losses and business closures, workers would be unable to find new jobs to replace lost income. In fact, most states, including Missouri, waived the required job search for a portion of the year.

Exactly how much unemployed workers receive, and for how long, depends on how much they earned and how much they worked in a recent 12-month period. Some people do not qualify for the maximum 20 weeks of payments.

The minimum benefit in Missouri is $45 per week and the maximum is $320.

Those state payments come from payroll taxes paid by employers. Because the fund had an average balance of $650 million throughout 2019, taxes to support the fund will fall in 2021.

To keep it high, possibly high enough for another tax cut for 2022, Parson and lawmakers have agreed to move as much as $400 million in state aid from the CARES Act into the fund at the end of the year.

So far this year, 982,054 Missourians have filed claims. As of Oct. 31, Delores Rose of the Department of Labor and Industrial Relations stated in an email, 97,989 Missourians had exhausted their regular benefits.

There were 43,242 people with ongoing claims in the third week of November.

The $600 federal supplement ended after the last full week of July. That was also the 20th week since the first surge in claims.

When Congress was unable to agree on legislation renewing the supplement, Trump signed an executive order authorizing an additional $300 per week to unemployed workers. That money lasted until the first week of September in Missouri.

Along with the supplemental payment, Congress included two other provisions to support incomes for the newly unemployed. One was for extended benefits, a regular feature of federal policy during recessions, that provided another 13 weeks to those who have exhausted their state claim.

Because the Missouri unemployment rate fell below 5 percent in September, extended benefits for the state stopped after the week ending Oct. 10. 

There were 4,499 claims for extended benefits the last week it was available, Rose wrote.

The other program authorized by the CARES Act was Pandemic Unemployment Assistance, with up to 39 weeks of payments to people who otherwise would not qualify.

People who lost jobs as early as Jan. 27 are eligible for the program, called the PUAC by the labor department. Payments started at the minimum state benefit, plus any federal supplements, and were adjusted after the worker provided proof of income.

There have been 140,578 claims for pandemic unemployment assistance, Rose wrote.

Unless Congress acts on a new stimulus package, the last pandemic benefit payments will be for the week that includes Christmas.

Unemployment rate

The unemployment rate is not determined by the number of people receiving unemployment benefits. Instead, Goss noted, it is based on surveys conducted monthly by the U.S. Department of Labor.

The department tries to reach 60,000 households a month and 300,000 businesses. The household survey is used to estimate unemployment and help determine the estimated size of the labor force, while the business survey is used to determine total employment, he said.

To be counted in the labor force, and unemployed if not working, a person must be over 16, looking for work and available for work. If the calculation for October had included the 160,000 people no longer part of the workforce as unemployed, the state rate would have been 9.5 percent, not 4.6 percent.

The unemployment rate, Goss said, is “the pygmy of economic indicators because it is so full of problems.”

The job losses in Missouri this year are spread across almost all sectors of the economy.

The hardest hit has been leisure and hospitality, which employed 254,800 people in October, down 55,800 from a peak set in February. Other sectors that have lost jobs in large numbers include manufacturing, 14,500 jobs, trade, transportation and utilities, down 19,600 from a January peak, professional and business services, off 17,900 jobs since a high in February.

Only construction, which has added 5,000 jobs since February, is up substantially this year.

Prospects for help

Lawmakers at the state and federal level need to focus on preserving existing jobs and providing relief for the long-term unemployed, said Richard von Glahn, policy director of Missouri Jobs with Justice.

He would like to see an idea resurrected and supported in the spring by Sen. Josh Hawley, a Republican, for the government to underwrite payrolls until business revenues recover.

“I would agree with what many economists have suggested is the best way for the economy to recover is to freeze things in time,” von Glahn said. “They would get the support to continue and when it is safe for an industry to recover you can have all your experienced and talented workers come back into your industry.”

In the current stimulus negotiations, Hawley has teamed with U.S. Sen. Bernie Sanders, I-Vt., to support new direct payments to individuals.

State lawmakers could help by restoring unemployment benefits to 26 weeks, which was the law until 2011, Von Glahn said.

A stimulus plan is definitely needed to boost the economy, Goss said.

“In 2021 you are facing a large increase in bankruptcies from small businesses that have been hanging on with [Paycheck Protection Program] loans and now they need some money coming in from consumers and businesses,” he said.

There is no certainty that Congress will act on a stimulus before it adjourns and a new Congress begins in January. Most efforts to provide new relief died in a political morass.

The food pantry provides certainty.

The pantry has seen a significant increase in traffic this year, despite operating as a drive-thru before recently switching to limited indoor traffic. The Missouri National Guard helps direct traffic as people wait. 

The pantry helped 12,470 people in October, food bank spokesman Seth Wolfmeyer said. That is 2,127 more than October 2019. The food bank distributed 5.3 million pounds of food in September and October, he said, 250,000 pounds more than the same period of 2019.

Richard Walston and his wife, Lisa, load groceries Dec. 2, 2020, after visiting the Central Pantry in Columbia, Mo. Photo courtesy Rudi Keller/Missouri Independent

At the pantry, no one asks why anyone needs the food and other household supplies available, Wolfmeyer said.

“Tracking the cause for that increase is different and harder for us,” he said.

Richard and Lisa Walston were picking up supplies for their household of seven, which includes two of their children and three grandchildren.

Their retirement income must support the whole family, they said.

“Right now we are the only ones bringing anything in,” Lisa Walston said.

Their daughter hasn’t worked since the spring and has exhausted her unemployment benefits. The pantry is a big help, she said.

That and selling personal goods.

“The pawn shop owns half my stuff,” Lisa Walston said.

Read this article at the Missouri Independent.

Related Articles

Leave a Comment

Back to top button
%d bloggers like this: