While there are no shortages of economic issues to tackle these days the circumstances surrounding unemployment get a great share of the attention. I am not going to argue with that given the difficulty I have envisioning an economy doing “alright” with 20 million unemployed. Since the claims numbers sky rocketed people ask me less frequently (yes, that is less frequently, not stopped asking) if we are in a recession. It is also the case that the fiscal policy arguments right now in Washington are more of a fight over how or whether to assist unemployed people and get an economic recovery started.
The labor constraint in North Dakota is a real phenomenon and at times represented a huge loss of potential output and income for the state. The sub-optimal level of employment did not spare workers here from unemployment as seen over the last weeks. What I am most concerned with in this post is giving some sense of the scale of the issue.
“Scale” is an important point to bring up here. There are such market size disparities across the different areas of the state, for example counties, that the display of data needs to be carefully planned. Most graphs attempting to display numbers will quickly put Cass County into a large position that compresses the scale to remove all variation from other counties. To say the least this is not helpful. With that in mind I scaled all counties’ claims data by their February level of employment as reported by the Bureau of Labor Statistics. In this way all counties can be on an even footing with percentage changes.
To start I show the three larger counties and what the experience with claims over the last nine weeks was, again, all taken as a percentage of February employment. The time unit in all graphs are the weeks after the first case of COVID-19 reported in the state.
There is some notable similarity here. The rapid rise in the claims percentage and a peek four weeks after the first case. However, at its worst the peak was around 4 percent in that one week, after repeated weeks of increasing claims. The other pattern to note is the different pattern of declines for the three counties. Burleigh encounters a fairly smooth and persistent drop. Cass and Grand Forks counties however flattened for a period before beginning resuming their decline. Looking at all counties in week 4 we get the following map.
The major metropolitan areas and a county with a border crossing into Canada were the major areas for unemployment claims. This is not an enormous surprise, though the progression from week to week varies. I have maps for all the weeks but I do not want to bore you with them. If you would like to see them shoot me an email or post a comment asking me to post them. Another way to consider this is by looking at the cumulative claims numbers, again as a percentage of the February employment levels by county.
This picture tells a bit more interesting story. The hot spot for initial unemployment claims is Williams County. Not a real surprise there. It is the epicenter for the oil price war impacts in North Dakota and then add in the COVID-19 impacts and they have a confluence of issues that is difficult to beat in the state. The cumulative percentage there is over 21%. Burleigh and Cass counties were just over 15% for the 9 weeks and Grand Forks county came in at 16% in the same time frame.
These are big numbers and should better reflect the totality of the labor market disruption we face. Sure some of these people may find jobs quickly, though COVID-19 likely makes this more difficult for many. However, that does not change the fact that over the last 9 weeks 10 counties in North Dakota had initial unemployment claims in excess of 15% of the February level of employment. I did not mention it earlier, but there are a large number of claims with no county listed so these numbers could be even larger.
We cannot address the necessary scale of the potential solutions if we do not understand the scale of the problem. These high levels of claims of unemployment benefits are indicative of at least two things: 1) there is a significant issue of people without work in North Dakota, and 2) there should be an ongoing concern for the demand side of the economy the longer unemployment persists.
There is no simple, guaranteed solution to this problem. In fact, the longer unemployment problems persist the more they are likely to continue. Skills erode on the worker side and employers find ways around shortages of workers. There need to be policies implemented to address the entirety of the problems for maximum effectiveness. Out of Washington we really are not hearing such discussion, so we need to hope for better within North Dakota.