Virginia’s unemployment rate surpasses 10% in April

As the COVID-19 pandemic fueled the closure of businesses across the country, the unemployment rate in Virginia rose in April to the highest level recorded. The Virginia Employment Commission reported Friday that the rate rose to 10.6% in the month, up from 3.3% in March.

The number is likely to grow in May and June, said Sonya Ravindranath Waddell, an economist with the Federal Reserve Bank of Richmond.

“The hope is that we start to see that number come down in July and the rest of the year,” she said.

The state began collecting unemployment rate data in 1976. The highest rate until now had been 7.9%, reached at the end of 1982, Waddell said. Even the Great Recession

only pushed the rate to a peak of 7.5% in February 2010.

The national unemployment rate in April rose to 14.7%, according to the U.S. Bureau of Labor Statistics.

“We have become somewhat numb to the numbers,” said Old Dominion University economist Robert McNab. The peak in initial claims for unemployment compensation appears to have passed several weeks ago, he said, but layoffs are still happening, and it doesn’t appear that they will be stopping for the next couple of months.

“I think we’re growing increasingly pessimistic for a short recovery,” he said, adding that bouncing back from this might take as long as it did to recover from the last recession more than a decade ago. Data from states that were early to allow businesses to reopen, including Texas, Alabama and Florida, show economic improvement, but “that new normal is still significantly less than where we were three months ago,” McNab said.

As for unemployment, an extra $600 a week in federal benefits is set to expire by the end of July, which could result in people going back to work as the economy ticks back up. Many people have been able to earn more while out of work than at their jobs because of that federal aid and state unemployment compensation, which goes as high as $378.

As that federal bump goes away, the unemployed who have a job to return to will have to calculate the risks of exposing themselves to the virus and, possibly, the costs and availability of childcare.

If the benefits aren’t extended, “the scale of suffering is likely going to increase dramatically,” McNab said. The extra unemployment amounts “have at least prevented the wholesale collapse in the rental and housing markets,” he said, because it enabled many to secure the means to pay rent and mortgages.

Job losses have disproportionately affected women more than men across Virginia. Every week since March 15, more women than men have filed initial unemployment claims. That’s despite women accounting for about 47% of Virginia’s 4.4 million-person workforce, according to U.S. Census data for 2019. During the week ending April 4, for example, when a record 147,369 people filed claims for unemployment compensation, women accounted for 59%.

While the total number of initial claims has been dropping each week since, the numbers have still far surpassed the weekly record set in December 1989, when a little more than 25,000 people filed for unemployment, Waddell said.

That has meant a flood of claims being made with the Virginia Employment Commission in a short period of time.

Gov. Ralph Northam announced Friday that the state would open an additional call center and staff it with 315 people to help handle the influx of unemployment requests. The Associated Press reported Thursday that the Virginia Employment Commission’s five-person customer service team receives as many as 20,000 emails a day, and the recently laid off have been frustrated by the agency’s phone system.