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Policy Matters Ohio

JobWatch: Jobs lost in December for first time since recovery began

January 22, 2021

JobWatch: Jobs lost in December for first time since recovery began

January 22, 2021

Unemployment rate falls due to shrinking labor force

The numbers: Seasonally adjusted data released today by the Ohio Department of Job and Family Services (ODJFS) show that employers cut 11,500 jobs in December, marking the first month of overall job losses since the recovery began slowing in July.

According to the employer survey:

  • Employers in private service-providing industries cut 5,600 jobs. Cuts in Leisure and Hospitality (-9,200), Educational and Health Services (-6,200), Professional and Business Services (-1,000) and Information (-200) exceeded gains in Transportation, Warehousing and Utilities (+8,600), Financial Activities (+2,100) and Other Services (+300).
  • Employers in private goods-producing industries slashed 900 jobs overall, as cuts in Manufacturing (-1,100) and Construction (-100) exceeded gains in Mining and Logging (+300).
  • Government eliminated 5,000 jobs, including losses to local (-5,600) and federal jobs (-100). The state government added 700 jobs.

Ohio had 5,241,700 jobs in December, down 350,200 from December 2019.

The separate household survey found that Ohio’s unemployment rate fell to 5.5% from 5.7% in November, but there are not more Ohioans working. The unemployment rate is the share of people without jobs who belong to the labor force, which counts only those working or actively looking for work. Last month Ohio’s unemployment rate fell because 52,000 Ohioans left the labor force, exceeding the number of new job losses for the month. The U.S. unemployment rate was 6.7%. This month’s data underscores how pinning extended unemployment benefit extensions to improvements in the state unemployment rate can lead to premature benefit cuts.

Policy Matters Ohio researcher Michael Shields issued this statement:

What it means: Ohio employers added fewer and fewer jobs nearly every month since August, but December marks the first month that employers cut jobs overall since the recovery began. This trend shows that policymakers haven’t provided enough COVID relief. More Ohioans are claiming unemployment, too: The nearly 43,000 initial claims filed the week ended Jan. 16 were Ohio’s highest since the week ended May 16 and more than double the number in late summer and early fall. Some 378,000 Ohioans filed continuing claims for unemployment benefits (265,000) or received Pandemic Unemployment Assistance under the separate federal program formed in response to the COVID recession (113,000).

States are now retroactively extending jobless benefits passed by Congress just as they expired last month. Congress also partially restored the federal payment to unemployment compensation recipients at a reduced rate of $300 per week, down from the $600-per-week payment policymakers let lapse in July. Those payments expire March 14, while extended benefits last just 11 weeks, giving Ohioans a maximum of 50 weeks including prior extensions.

Solutions:

Congress should extend jobless benefits and replace time limits with economic triggers. The 11-week extension of jobless benefits passed this month by Congress will rapidly run out without further legislation, and enhanced payments will end abruptly in March. Additional extensions of both programs are needed. President Biden’s plan to extend benefits at least through September with a $400 weekly federal payment to recipients is a good start. Restoring the full $600 would be better: The Economic Policy Institute found that doing so along with moves to extend long-term benefits would support 185,000 jobs in Ohio through enhanced consumer spending.

Ohio should invest in an unemployment benefits system that works. ODJFS has said that extended benefits will not be restored for the last Ohioans – those previously receiving PUA who have exhausted their benefits – until February 26. The delay puts Ohio weeks behind at least eight states that have already gone live with the new pandemic unemployment program. Funds will be distributed retroactively, but the delay will create extreme hardship for those awaiting benefits.

Last word: “Last month’s job cuts are a somber reminder that beyond its disastrous toll in lives lost, COVID-19 continues to wreak havoc on Ohioans’ ability to earn a living. Policymakers cannot continue to allow benefits to lapse and exacerbate the crisis. Congress must respond with rapid and deep commitments to bolster unemployment benefits as long as they are needed, and Ohio must quickly distribute funds.”

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2021CoronavirusJobWatchMichael ShieldsWork & Wages

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