One month of COVID19

A "closed for now" sign is seen on the door of a business in the Cipher Building along King Street in Lancaster city, Tuesday, April 14, 2020.

The unemployment rate in Lancaster County has surged amid the COVID-19 outbreak to more than twice its peak in the wake of the Great Recession a decade ago, new data show.

An estimated 18.0% of the labor force is without work, based on calculations by LNP | LancasterOnline, compared to 3.6% in February, due to a deluge of layoffs triggered by the pandemic.

More than 41,000 workers here have filed new claims for unemployment benefits since March 1, according to the Lancaster County Workforce Development Board. They joined 10,400 workers who already were without jobs here.

“This is one more level of confirmation that we are in an unprecedented situation. It’s painful to see how much disruption is going through our economy,” said Tom Baldrige, president and CEO of the Lancaster Chamber. “These numbers show just how far reaching the pain is.”

While Lancaster County’s unemployment rate had recently been at low levels, the sudden and steep job losses raise the question of how much disruption even such a strong economy can withstand.

“What does our economy look like when it starts to reopen?” Naomi Young, director of the Economic Development Company of Lancaster County’s Center for Regional Analysis, said. “How much is the job loss a reflection of the governor’s order versus the first step in the loss of businesses?”

Strong economy weakens

The local labor force – people with jobs and people without them -- numbered 287,200 as of February, the latest available figure provided by the state Department of Labor & Industry.

Since L&I began providing county jobless figures on a monthly basis in January 1976, the worst unemployment rate here had been 9.2% in January 1983, L&I records show. In January 2010, in the wake of the Great Recession, the local rate reached 8.4%.

But those two peaks followed months of economic decline. This new peak materialized in a matter of weeks, upending what had been a healthy and strong economy in which the rate bottomed out last summer at 3.0%.

Adam Ozimek, a Lancaster resident and chief economist at Upwork, said the recent strength of the local economy could lead to quicker rebound now than what was required after the Great Recession since “most of these jobs aren't truly lost yet.”

“In a normal recession, when someone is unemployed it means they have to find a brand new job. New jobs take time to find, and it also takes the economy time to create new jobs,” said Ozimek, who is also an owner of Decades restaurant in Lancaster. “However, today these jobs aren't gone; they are just on hold as employers are shut down by government mandate and virus risk.”

Yet Ozimek cautioned: “Unless we can prevent a wave of business failures, these temporary layoffs will turn into permanent ones. Making sure businesses don't go under is how we prevent this record high temporary unemployment from turning into the kind of job loss that takes a long time to fix.”

Job losses mount

The number of unemployed in Lancaster County and across Pennsylvania began to surge on March 13, the day Gov. Tom Wolf began closing certain businesses to prevent the spread of COVID-19, which has killed more than 700 and infected nearly 28,000 Pennsylvanians.

The number of new unemployment claims peaked at the end of March, when many companies ended their payroll for the month.

As of Tuesday, 41,441 Lancaster County residents had filed new claims for jobless benefits since March 1, an average of 921 a day. A year earlier, when COVID-19 didn’t yet exist, some 20 county residents filed new claims a day, according to the Workforce Development Board.

The occupations hit hardest by the outbreak have been administration and business, with nearly 5,000 workers seeking unemployment benefits; food service, with more than 4,000 seeking benefits; skilled trades, with more than 3,000 seeking benefits; construction; retail; manufacturing; health and dental; and transportation, the data show.

Mike Callahan, CEO of Benchmark Construction, said his firm was forced to lay off about 90 of its 225 employees as some jobs were shut down near the beginning of what was shaping up to be a busy construction season was underway.

“Everyone was so confident. Everything look so good,” he said. “Talk about throwing the brakes on that.”

Yet, after weeks of slowdowns and cutbacks, Callahan says Benchmark has slowly begun to bring some people back, an effort he hopes can soon gain momentum if Wolf loosens restrictions.

“He’s working on flattening the curve on this COVID-19 virus … now he needs to work on flattening the curve of the unemployment that is taking place,” Callahan said.

The official unemployment rates for the 67 counties and 18 metropolitan areas in Pennsylvania are produced by L&I. The department will report the March unemployment rate for Lancaster County on April 28, based on the number of unemployed people here in mid March. L&I will report the April rate for Lancaster County on June 2.

On Friday, Wolf outlined a general approach to reopening businesses, saying it would be driven by data about the spread of the disease and supported by robust testing and monitoring. Extended protections would remain in place for vulnerable populations while limits would remain on large gatherings.

Wolf said he planned to offer more specifics next week about how some businesses will be allowed to reopen.

“We all want to get back to where we were. We all want to get back to work. We all want businesses to reopen as quickly as possible. We also want to keep people safe,” he said.

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