Coronavirus unemployment crisis deepens in Florida and U.S.
A record-shattering 6.6 million Americans applied for unemployment aid last week. In Florida, 227,000 applied. A faulty state website blocked many.

By Graham Brink and Richard Danielson
Tampa Bay Times
Published: Apr 2, 2020

The jobs picture for Florida and the nation went from historically bad to even worse Thursday with the news that 6.6 million laid-off Americans last week filed claims for unemployment assistance — more than double the 3.3 million who applied the week before.

Florida reported 227,000 unemployment claims for the week ending March 28 — more than triple the previous week — but the number likely understates the size of the state’s job losses.

The state Department of Economic Opportunity’s overwhelmed unemployment website has blocked untold numbers of laid-off workers from filing an unemployment claim.

Nicola Hauber, 66, has tried to sign up for two weeks, ever since she lost her job as a baker at the Cinnabon at the Westfield Countryside mall in Clearwater.

She has tried to apply online with no luck. She called the help line multiple times a day, but no one answers. She has also tried to send texts.

“Nobody answers ever,” she said. “There’s no answering service. You can’t leave a message. There’s nothing.”

Since mid-March, an unprecedented number of workers have lost their jobs as a result of efforts to curb the spread of the virus that causes COVID-19, the respiratory disease that so far has killed 101 patients in Florida and 4,757 nationwide.

With the number of cases and deaths expected to grow in coming weeks, Florida Gov. Ron DeSantis on Wednesday issued a statewide stay-at-home order, which takes effect at 12:01 a.m. Friday and will suspend more business and result in further job losses.

The collapse of the labor market, which saw record low unemployment of 2.8 percent in Florida during February, is one domino in a line of interlocking economic calamities.

“Florida’s in a recession right now,” Florida Chamber Foundation chief economist Jerry Parrish said this week.

The counties that "will get hit the hardest” will likely be those with private sector jobs most dependent on leisure and hospitality, Parrish said. That list is topped by Monroe (Key West), the Panhandle counties of Franklin and Walton, Nassau County north of Jacksonville, and Orange County.

“No doubt, we’ll also lose jobs in manufacturing and transportation due to supply-chain issues as well,” he said.

And it could get worse, economists say.

Nationwide unemployment could hit 32.1 percent this spring as a result of coronavirus-related shutdowns, Federal Reserve Bank of St. Louis economist Miguel Faria-e-Castro wrote last week. That would be nearly 10 times what unemployment was in February and higher than it was during the worst days of the Great Depression.

At that rate, an estimated 52.8 million Americans would be unemployed out of a total work force of 164.5 million. Those, he said, could include workers in two overlapping groups. One consists of people in industries with a high risk of layoffs due to social distancing measures: sales, production and food preparation and service.

The other is workers whose jobs require them to have intense amounts of contact with the public: waiters, airline attendants, barbers and hairstylists, among others.

“One can argue that the expected duration of unemployment matters more than the unemployment rate itself, especially if the recovery is quick, and (the) duration is short,” Faria-e-Castro wrote. “These are very large numbers by historical standards, but this is a rather unique shock that is unlike any other experienced by the U.S. economy in the last 100 years.”

Along with that joblessness will be dramatically less business activity.

National gross domestic product from April to the end of June is expected to fall about 18 percent, according to forecasts from Goldman Sachs, JP Morgan, Morgan Stanley, UBS and Deutsche Bank issued over the last week. That would be the sharpest downturn in U.S. history.

StratoDem Analytics, a research firm based in Massachusetts, used those forecasts to predict what would happen to large and mid-sized counties across the country. Pinellas, for instance, could see a 20 percent decline during those months, which amounts to about $2.7 billion in lost economic activity during those months.

“At a more human level, that’s approximately $6,100 of lost GDP per household ... primarily due to fewer people generating economic output at work,” the StratoDem report concluded.

Hillsborough, which has a comparatively diverse economy, won’t be hit as hard, though it could experience a nearly 16 percent drop.

Several Florida counties that rely more heavily on tourism will get hit the hardest, StratoDem predicted. Manatee would see a 28 percent drop. Lee County, home to Fort Myers, would fall 27 percent, and Collier County, also down 27 percent. All three will be among the hardest hit large or mid-sized counties in the country, StratoDem said.

How the fall in GDP translates to job losses is the “trillion dollar question,” said James Chung, a partner at StratoDem.

The federal stimulus package will mitigate the number of lost jobs, but “it won’t get us back to zero," he said. The crisis has increased demand for jobs in fields like health care or delivery services, which will also offset some of the losses.

“I wish we could forecast that with precision,” he said. “It’s fairly safe to predict that the Tampa metropolitan area will likely see more than 100,000 jobs lost.”

In February, before the crisis took hold, nearly 48,000 people were unemployed out of a Tampa Bay area labor force of 1.58 million. Add another 100,000 and the unemployment rate would jump to over 9 percent.

Those workers would encounter a swamped claims system.

Hauber, who lives in Clearwater, also applied for benefits about five years ago. She said it was fairly easy then because she could walk into an office and get help. She doesn’t hear or see well, she said, so having a person guide her was helpful. But that office doesn’t exist anymore, she said.

Back then, she inputted a personal identification number. Now the system is asking for the same PIN, which she cannot remember. And she has not been able to get the system to help her reset it. She’s worried that she will miss out on some of the federal benefits.

I know lots of people with the same problem,” she said. “They can’t remember their PIN from years ago and there is no way to change it. There’s no help at all. I can’t tell you how frustrating this is. People need the money, they need the help and the state is failing.”

In Florida, those who do manage to apply for unemployment benefits get less money and fewer weeks of assistance than laid-off workers in most other states.

The state’s maximum benefit of $275 a week is the same as 22 years ago. Since then, the Republican-controlled Legislature and several Republican governors have worked to keep benefits low. Employers pay a percentage of each employees first $7,000 of wages into the trust fund. For the last five years, most companies have paid 0.1 percent, the minimum amount.

Former Gov. Rick Scott, in particular, championed the idea that the tax was a burden on businesses and signed a law in 2011 that cut benefits. He said he would rather find people jobs than give them government benefits. At the time, employees could collect state benefits for up to 26 weeks.

The new law cut the maximum to 23 weeks and created a sliding scale that lowered the amount to 12 weeks when the unemployment rate dropped below 5 percent. The new law also made it easier to deny benefits for “misconduct.”

Florida went into the Great Recession with more than $2 billion in its unemployment insurance trust fund. It came out owing the federal government $1.8 billion and millions in interest payments. The trust fund had a little more than $4 billion when the current crisis struck. If unemployment rates climb as high as some experts predict, the state could blow through that money by early next year.