The weekly initial unemployment claims — which are filed by unemployed workers after being separated from an employer seeking eligibility to receive unemployment benefits — rose in Oklahoma from 1,569 during the week ending March 7, prior to many of the business closures and “safer-at-home” orders by state and local governments, to 44,970 for the week ending March 28, the numbers show.
Initial unemployment claims are considered a leading economic indicator since it is an indication of emerging labor market conditions in the county.
The number of unemployment claims being filed is historic, and far outpaces those of the past three recessions going back to the late 1980s, according to Oklahoma Employment Security Commission data.
Nationally, initial unemployment claims jumped by 3,318 percent from the first week of March to the last, increasing from 200,375 applications for the week ending March 7 to 6,648,000 initial applications filed for the week ending March 28, the Department of Labor data shows.
Trey Davis, speaking on behalf of the OESC, said there is no other period since OESC began keeping data that compares to the current level of unemployment filings.
“Oklahoma and the nation haven’t seen this dating back as long as records have been kept, which is around 1989, I think, for Oklahoma,” David said.
Earlier this month, the U.S. Department of Labor sent emails to state unemployment agencies requesting they limit unemployment information provided to the public and unemployment levels should only be described in generalities, according to a report last week by journalists Jack Money and David Dishman.
The data was released hours after Oklahoma Gov. Kevin Stitt on Wednesday announced that he was expanding his executive order requiring nonessential businesses to close to all 77 counties. Stitt’s original March 24 order to shutter “non-essential” businesses only applied to 19 counties that had shown evidence of community spread of the disease, but less than a week later 48 counties had shown evidence of community spread.
As of Wednesday, the Oklahoma State Department of Health had confirmed 719 cases of COVID-19 in the state, 219 hospitalizations and 30 related deaths. Stitt’s executive order that nonessential businesses be closed was in effect for 48 of Oklahoma’s 77 counties.
Earlier this month, Stitt issued an executive order waiving the one-week waiting period for unemployed workers to begin receiving unemployment benefits, and President Donald Trump signed a bill last week that would add $600-per-week to unemployment payments for up to four months, extended the length of time workers can draw unemployment by 13 weeks and allows self-employed workers to receive unemployment benefits.
During a conference call Wednesday with businesses and economic development organizations, Oklahoma Secretary of Commerce and Workforce Development Sean Kouplen said the Oklahoma Employment Security Commission has been “overwhelmed” by the number of unemployment claims being filed, and encouraged workers seeking unemployment to use the commission’s online filing system. The OESC’s physical offices closed to the public earlier this month to prevent the spread of the virus.
“We are just struggling to be able to handle all the inflow of all the calls and online applications we are getting,” Kouplen said. “Needless to say, we’re adding resources as fast as we can — adding lines, adding people. But it is much, much better if people go online (to apply).”
Kouplen estimated that the OESC was handling around 13,000 claims per-day as of Wednesday, and that the unemployment rolls in Oklahoma have gone from around 60,000 to more than 135,000.
“Our unemployment has doubled since this started,” he said. “Frankly, it has more than doubled now.”
However, Kouplen said, Oklahoma’s unemployment insurance trust fund is strong, and ranked seventh in the nation for solvency in the U.S. Department of Labor’s 2020 trust fund solvency report.
According to that report, the state had a balance of more than $1.1 billion in its unemployment trust fund account, and thus was eligible for interest-free borrowing.
Davis told The Frontier that at the current rate of claims being filed, it is anticipated that the trust fund, from which unemployment payments are made, would be exhausted in about 10 weeks. If the fund gets close to having just $25 million in it, state law requires that the commission put in place an employer surcharge to replenish it, and borrowing from the U.S. Department of Labor to keep the fund solvent might also be an option.
“OESC may need additional funding from the legislature to continuing paying unemployment insurance,” Davis said. “We understand there are ongoing discussions in Washington regarding the solvency of various state trust funds. It may be that Congress will consider additional funding to states to assist in paying unemployment insurance.”
Davis said the commission has received assistance from OMES to expand its bandwidth for its claims site, as well as additional personnel from other agencies to assist with its call center.
“Still, the best way to file a claim is online,” Davis said. “Individuals calling the agency will experience long wait times of two hours or more, may be disconnected by the system, or unable to get through all together.”
Davis said some employers are still seeking employees, and recommended those seeking work or employers seeking employees should go to www.okjobmatch.com.
Though much of the downturn is in response to the measures put in place to prevent the spread of COVID-19, the oil and gas industry — long a pillar of Oklahoma’s economy — is also seeing oil prices plummet, both because of restricted travel and because of Saudi Arabia and Russia flooding the market with oil, Oklahoma Secretary of Energy and Environment Kenneth Wagner said Wednesday.
Wagner said there was little indication of energy sector specific bailouts coming yet.
“There’s no white knight coming to save our energy industry from the triple whammy,” Wagner said.
Part of the latest Congressional stimulus bill created the Payroll Protection Program, which businesses can use to receive short-term no-interest loans backed by $350 billion in federal funding to help businesses cover workers’ payroll, medical benefits and retirement funds. Oklahoma Sen. James Lankford, during a video conference with businesses on Wednesday, encouraged businesses to contact their preferred lender and sign up for the program, which opens Friday.
“It doesn’t require small businesses to come up with the cash first. It actually extends that credit to the small business so they get the cash and can pay their employees,” Lankford said. “If they keep their employees all the way through the end of June, then that amount is forgiven entirely. So, the goal is, this is a way to be able to provide unemployment insurance to do two things — keep people with a normal paycheck that is coming in for wage and salary employees. The second thing is when this virus passes and we get on the other side of this, we want businesses to restart. The only way to have people restart quickly is if they already have the relationship with their employees. Otherwise, they have to re-hire, re-train and it’s a much slower restart on our economy.”
Lankford said employers who have laid people off should rehire them, regardless of whether or not the employee is having to remain at home because the business is shut down, since the program covers both employees remaining at home and those deemed essential who must still show up to work.
If the employer — whether a for-profit or non-profit — maintains its payroll for the next eight weeks, the loan is forgiven, Lankford said.
“The priority on this is people stay employed and keep a paycheck,” Lankford said. “If you’ve laid people off already, once you get this loan in place, we encourage you to rehire those folks. Just say ‘OK, I can put you on for the next eight weeks that you’ll get your normal payroll even though you’re at home.”
However, Kouplen warned that some employers may face difficulty rehiring employees who have already filed for unemployment, since the extra $600 per-week in unemployment benefits per-worker could mean a significant pay bump for lower wage workers.
“It’s actually a real problem for businesses because we’re going to ask businesses to hire people back and this is basically the equivalent of a $50,000 salary,” Kouplen said. “So, it’s going to be challenging to try and convince people to come back when they get this rich of unemployment benefits. But I’m obviously happy for those people who are unemployed.”
Kouplen said the OESC is waiting on rules for the $600-per-week increase to unemployment benefits from the U.S. Department of Labor.
Kouplen also encouraged businesses to apply for Small Business Administration disaster loans that can serve as a line of credit through the end of 2020, and said that businesses can receive both PPP benefits and an SBA loan, so long as they do not include in their SBA application payroll as being an expense to be covered by the loan. Further information about those programs is available through the Oklahoma Department of Commerce’s COVID-19 webpage.
“Every business in Oklahoma, in my humble option, should apply for both of these programs,” Kouplen said. “There’s really no reason not to.”
Note: This article was updated at 3:26 p.m. April 2, 2020 to include comments from OESC spokesman Trey Davis.
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