Texas’ jobless figure nears 2M
Low-income areas in Houston hit hard by shutdown losses
More than 254,000 people filed for first-time unemployment benefits in Texas last week, according to a weekly report from the Department of Labor, as measures to slow the spread of the novel coronavirus combined with the worst oil bust in history have left nearly 2 million Texans jobless.
Since March when business shutdowns began to prevent exposure to COVID-19, the disease caused by the coronavirus, 1.9 million Texans have filed applications for benefits, according to the Texas Workforce Commission, which administers unemployment benefits. That’s more than double the number of claims submitted in the state during all of 2019.
Low-income neighborhoods have been hit particularly hard, according to an analysis of state data by Rice University’s Kinder Institute. Areas with the most unemployment claims also tend to be populated by majority renters, according to the analysis.
Even with the huge numbers of claims, the data still likely under
states the extent of economic damage from the coronavirus in Texas. Overwhelmed websites and phone lines prevent an untold number of people from filing claims. A survey by the Economic Policy Institute found that for every 100 workers who filed for unemployment insurance, 37 additional workers tried to apply but could not connect with the unemployment benefits system to make a claim.
$2.7 trillion in benefits
The Texas Workforce Commission, which administers unemployment benefits, has struggled to keep up with the rising number of claims. The agency has added computer server space and several call centers in recent weeks to address the backlog.
The agency has paid $2.7 trillion in unemployment benefits this year, according to the TWC. More than 86 percent of the total has been paid through the CARES Act programs, the stimulus bill that expanded unemployment benefits for those not traditionally eligible and added $600 per week to the benefits of claimants who are out of work because of the pandemic.
Vulnerable areas hit hard
The areas of Harris County most affected by job losses in the last two months are typically lowincome, according to the Kinder Institute. That’s because accommodation, food services and retail have been among the most impacted industries — at least 33,000 accommodation and food service industry jobs may have been lost during the COVID-19 shutdowns in Harris County, according to the analysis. Baytown and La Porte were among the communities hardest hit by unemployment in those industries.
The neighborhoods with some of the highest estimated jobless rates also are among the poorest. For example, Gulfton, a neighborhood in southwest Houston near Bellaire, has a poverty rate of 38 percent. Its unemployment rate was 4 percent in 2018, but researchers estimate that the community’s unemployment rate has more than doubled to 9.4 percent.
Economists at the Federal Reserve Bank of Dallas say Texas’ unemployment rate is at least 12 percent, which still could be underestimated since models are based on actual claims for unemployment benefits and miss those still waiting to get into the system.
Just a year ago, Houston’s unemployment rate was the lowest recorded in more than a decade. But Houston’s unemployment rate will likely surpass that of the nation, if history is any guide. The 2016 oil bust eliminated thousands of energy jobs in the region, leaving it with a jobless rate higher than that of the nation and wage growth that lagged the rest of the country.
A slow return
Nationally, jobless claims continue to surge, with 3.8 million workers filing for benefits last week. In the last six weeks, more than 30 million Americans have filed for unemployment, a level that economists at Oxford Economics estimate is near its peak.
Experts expect that the unemployment rate in the U.S. will hit near 20 percent and that the recovery will be slow. Even as some states, including Texas, begin to reopen businesses, economists say it could take two years for unemployment rates to return to pre-pandemic levels.