More than 42,300 people filed first-time unemployment claims in Maryland, a number that vastly exceeds the highest period of claims during the Great Recession.
The state numbers come as the U.S. Department of Labor reports more than 3.2 million first-time unemployment claims nationwide. Most of the claims were attributed to the fallout from the COVID-19 pandemic.
And while hotels and food services were especially hard-hit, the federal agency said health care and social assistance, arts, entertainment and recreation, transportation and warehousing, and manufacturing industries were also affected.
The new figures led one local economist to predict that state unemployment could move into double digits because of the virus, exacerbated by state-mandated increases in the minimum wage.
“As of January, Maryland’s unemployment rate was just 3.3 percent, with only 109,158 Marylanders unemployed,” said Anirban Basu, chairman of the Sage Policy Group. “Based on my computations, Maryland’s unemployment rate has already passed the 5 percent mark, and my prediction is that it will peak between 11 and 14 percent at some point next quarter. Of course, it could be worse. While raising the minimum wage to $11 per hour appears to have done very little in the way of constraining job growth during the state’s upturn, which picked up additional momentum beginning last summer, I remain concerned that that higher minimum wage will result in a faster pace of layoffs going forward than otherwise would have transpired given the need or desire among many area businesses to conserve cash.”
The data for March 15-21 represents first-time claims the week before Gov. Larry Hogan ordered all non-essential businesses to close on March 23.
Baltimore County and Baltimore city had the most residents — 6,763 and 5,392, respectively — file the most claims last week. Those two jurisdictions along with Anne Arundel, Montgomery and Prince George’s counties combined for nearly 58 percent of all first-time claims filed last week.
“The unemployment numbers reveal that the business closures and other restrictive measures being taken to curb the spread of COVID-19 are creating economic hardship for many and that is unfortunate but not unexpected,” said Donald C. Fry, president and CEO of the Greater Baltimore Committee. “The hospitality industry – hotels and restaurants –is a strong part of our regional economy and it has taken a significant hit which will drive up unemployment numbers. However, these steps taken by Governor Hogan are necessary and must be viewed as an investment in public health that will keep the pandemic to a minimum and help the economy turn around sooner rather than later.”
Fry said he expects the region to bounce back.
Since March 18, nine companies have provided notice to the state that they were about to lay off employee en masse. Those layoffs include 85 at MGM National Harbor, 88 at Silver Spring Gymnastics and Fitness, 150 at the Hotel at UMCP in College Park, 150 at uniform supplier ALSCO in Lanham and 122 at Delta Bingo & Gaming in Laurel, according to filings with the Department of Labor, Licensing and Regulations.
State labor officials this week touted the unemployment system as “fully operational,” but the combination of an unprecedented deluge of claims and systems strained by teleworking state employees has caused complications.
Some people filing claims reported long wait times for telephone service — if they could even get through to the department at all.
On Wednesday, Hogan urged Maryland residents to file online.
“Because of the unprecedented volume, which are, you know I don’t know 100 times or a 1,000 times higher than normal and the fact that because of the shutdown we’ve forced state workers to go into teleworking and the phone systems are crashing and overloading,” Hogan said during a Thursday interview on Washington’s Fox 5.
Hogan also cited problems with the federal unemployment website crashing. The state site is linked to the federal site and Hogan said Maryland officials were trying to get it fixed.
“The best thing is to do it by email and or go on the website, which isn’t crashing anymore,” Hogan said on the television interview.
Nearly 90 percent of all first-time claims with the state last week were made over the internet, according to state figures.
Still, there are anecdotal complaints, including one worker who said on social media that she was recently furloughed and ineligible to file a claim online and was experiencing trouble filing a claim by telephone.
Those new state claims easily top the weekly first-time claims filed during the Great Recession. Back then, Maryland’s highest numbers of new claims didn’t exceed 12,600 in a week. By comparison, in early March of 2020, the number of first-time unemployment claims in Maryland was 2,675, according to the U.S. Department of Labor.
The flood of first-time claims raise questions as to whether Maryland’s $1.3 billion unemployment insurance fund may need to be supplemented.
Following the Great Recession, the federal government has pushed for states to maintain a trust fund balance of 1.5 times its highest 12 months of unemployment benefits claims.
“We’re not quite there,” said Dayne Freeman, assistant secretary for the Division of Unemployment Insurance in the state labor department.
Freeman said the state is in a position to pay benefits for claims made now and is waiting to see what benefits will come from stimulus packages passed at the federal level.
“We’re hoping to see that the feds will be creating some federal unemployment insurance benefits and that won’t provide any pressure to the (state) trust fund,” said Freeman. “It’s a moving target.”