Unemployment jumped to a record high across Tennessee and Georgia last month as businesses closed and nearly one of every nine workers in both states was laid off or temporarily furloughed.
The Tennessee Department of Labor and Workforce Development said the jobless rate in April jumped to 14.7%, the highest rate on record in Tennessee surpassing the previous peak of 12.9% reached in early 1983. Employment plunged by 376,900 jobs in Tennessee from March to April and new jobless claims continue to flood into both states.
Although the pace of such initial claims is slowing and jobs are beginning to return as more businesses reopen, economists expect Tennessee's jobless rate will continue to climb this spring and could top 20% before beginning to fall in the second half of 2020.
"Even though unemployment was incredibly high in April, the pace of new jobless claims suggest that unemployment will likely increase even more in May and June," said Dr. William Fox, director of the Boyd Center for Business and Economic Research at the University of Tennessee.
Even for those still on the job, average weekly earnings for manufacturing workers in Tennessee dropped by 14%, or an average $112.86, a week as work schedules were cut in those factories still operating in April.
Tennessee's jobless rate matched the U.S. unemployment rate last month and was slightly above Georgia's 11.9% rate last month, which was also a modern day record high.
Employment across Georgia fell during the month by 10.7%, or 492,100 jobs to the lowest April level in six years. The leisure and hospitality sector, which includes the food services and drinking places and accommodation sectors, accounted for 206,700 of the job loss, 42 percent of the total jobs lost in Georgia.
Georgia Labor Commissioner Mark Butler said the unemployment rate is approaching levels last reached in the Great Depression. But he said the current market is far different and he doesn't such a lasting downturn as what America suffered in the 1930s
"The cause of this high unemployment rate differs greatly from that of the previous record, and I have no doubt that we will recover just as quickly and get back to our record lows once again," Butler said.
Indeed, even amid the record unemployment, fast-food restaurants across Tennessee are hiring workers and grocery chains like Walmart, Dollar General and Kroger's Peyton food distribution center in Cleveland, Tennessee are adding hundreds of local workers.
"We placed 100 workers in jobs this week so we're still seeing hiring going on," said Samatha Regalado, sales manager for Elwood Staffing in Chattanooga. "It certainly slowed down for some companies, but some employers are still hiring and I would expect many to look to fill jobs with temporary or contract workers while they see how the market comes back."
Photo by Dave Flessner / Despite record high unemployment, many fast-food restaurants are still hiring, including the McDonald's restaurant on Hixson Pike.Mark Campbell, owner of the Manpower franchises in Chattanooga, Cleveland and Athens, Tennessee said many businesses have slowed or quit hiring workers. But Campbell said some essential businesses are still trying to fill vacant jobs and some of those who have been laid off and are receiving jobless benefits may not want to give up those benefits for jobs that pay less than what they can get in government assistance.
"We don't have the jobs we did a couple of months ago at some businesses, but I have probably 40 open jobs I could fill today if I could get more workers," Campbell said.
Tennessee Labor Commissioner Jeff McCord said unemployed Tennesseans searching from work can find more than 150,000 current job openings on the state's workforce development website, www.Jobs4TN.gov.
Since the COVID-19 virus began shutting down non-essential businesses in March, a record 532,580 Tennessee workers have filed for jobless assistance in the past two months, including 54,791 persons in the 10-county Southeast Tennessee area. In Georgia, 855,088 jobless claims have been processed since mid March.
The economic pain from those job losses has been offset, to some extent, by the most generous unemployment benefits ever provided for those able to find jobs. In addition to the state jobless benefits that pay up to $275 a week in Tennessee and $330 a week in Georgia, the federal government is providing up to four months of a $600 a week supplement to those benefits. As a result, the average unemployed worker in Tennessee until July 25 is receiving $830 a week in jobless benefits, or the equivalent of a $43,160-a-year salary.
Jobless in April
* 14.7% in Tennessee, up from 3.3% in April* 11.9% in Georgia, up from 4.6% in April* 14.7% in the U.S. as a whole, up from 4.4% in AprilSources: U.S. Bureau of Labor Statistics, Tennessee Department of Labor and WorkforceDevelopment and Georgia Department of Labor
A new analysis released last week by economists at the University of Chicago estimates that 68 percent of unemployed workers who can receive benefits are eligible for payments that are greater than their lost earnings. They also found that the estimated median replacement rate - the share of a worker's original weekly salary that is being replaced by unemployment benefits - is 134 percent, or more than one-third above their original wage.
A substantial minority of those workers, particularly in low-wage professions like food service and janitorial work, may end up receiving more than 150 percent of their previous weekly salary.
Last week, unemployed Tennesseans were paid nearly $359 million in combined state and federal jobless benefits.
But getting those benefits has not been easy for some displaced workers trying to contact state agencies overwhelmed by the flood of jobless claims.
Cynthia Perry lost her job at the Mann+Hummel plant in Dunlap in March when the filtration equipment maker suspended production. She repeatedly filed for jobless benefits and made 309 telephone calls in May trying to get the unemployment insurance benefits she thought she would soon get after being laid off March 20.
"I had many questions, but no answers," she said.
After contacting state and federal officials and making repeated calls to the Department of Labor and Workforce Development, she finally got some good news this week and received a check on Thursday, with back pay for the deferred benefits, of about $4,800.
"It's been tough not having any money for nine weeks, but my kids have helped me out," she said. "Thank God I finally get this aid."
Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.
Photo by Dave Flessner / Fast-food restaurants like Burger King which reopened in the past month are looking for more workers, but employment overall dropped by 11% in April to push unemployment to a record high.