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Coronavirus pushes Arizona's jobless rate to potentially record high of 12.6%

Coronavirus pushes Arizona's jobless rate to potentially record high of 12.6%

  • Updated
Unemployment

Nearly empty parking lots at malls reflect the job losses in Tucson and across the country. Last month, Arizona’s jobless rate was 12.6% while the U.S. rate was 14.7%.

Arizona’s jobless rate spiked to a potentially record high of 12.6% last month.

And it’s certain to go higher as the figures reflect data only through the second week of April. Since that time, there have been another 230,000 first-time claims for unemployment insurance.

The news comes as Republican legislators quashed efforts by Democrats to increase the benefits available to the more than 577,000 people who have applied for unemployment insurance since the COVID-19 pandemic and the statewide orders by Gov. Doug Ducey shutting down many businesses. GOP lawmakers also blocked a vote on a proposal to allow people to get unemployment payments if they leave their jobs due to unsafe working conditions.

What’s behind the sharp increase in unemployment in April is the shedding of 276,300 jobs in the private sector from the prior month. The state normally adds 7,800 workers in April.

The biggest loss is in the leisure and hospitality industry, which includes bars and restaurants that were ordered closed except for takeout.

It also includes hotels, motels and resorts as many have been unwilling to travel. That is reflected in data from the Joint Legislative Budget Committee, which found tax revenues from these businesses dropped 57.5% from March.

The category also includes movie theaters, amusement parks and sporting events.

Other sectors of the Arizona economy also have been hard hit.

Retail trade shed 43,800 jobs — about 13.4% of total employment — as only “essential” businesses were allowed to operate. There also was the loss of 27,800 jobs in professional and business services.

Even the state’s health-care industry shed 16,800 jobs, likely due to hospitals being barred from performing elective surgeries and procedures, said Doug Walls, market research director for the state Office of Economic Opportunity.

Whether the 12.6% rate is a record is unclear.

Comparable data goes back only to the beginning of 1976. And in all that time the highest unemployment rate recorded was 11.5% during the 1982 recession.

Walls said the rate hit 13% in 1956, but the methodology used at that time was different.

Still, for the first time in years, the situation in Arizona is better than the rest of the country, with the United States posting a seasonally adjusted unemployment rate of 14.7%.

Walls attributes that to minimal losses in the state’s construction and manufacturing industries. Ducey’s directives did not shut down those sectors of the economy while governors in other states had broader orders.

PUSHING FOR BENEFITS

As the state was releasing the April data, House Democrats were attempting to use procedural maneuvers to get a vote on unemployment measures that the Republican majority has so far refused to consider.

Rep. Kelli Butler, D-Paradise Valley, made the proposals as amendments to bills being considered Thursday by the House Committee on Health and Human Services.

SB 1439 would require that women who want breast implants be given more information about side effects.

SB 1027 would allow medical boards to suspend or revoke licenses if a doctor or nurse performed or supervised a pelvic exam on an anesthetized or unconscious patient without first getting the woman’s informed consent.

SB 1570 would allow certain people to provide behavioral health services at a private office or clinic.

Republicans balked, noting that the amendments would have killed the underlying provisions of the Senate-passed bills because they were unrelated to the original subjects.

Butler acknowledged the importance of the bills, but argued there are more pressing issues, like worker safety.

One proposal would create an exception to Arizona law which generally says that people who quit work voluntarily are ineligible for benefits. It would permit people to collect if an employer “failed to cure a working condition that made the work environment unsuitable for health or safety reasons.”

“What is more important is addressing the public’s concern about their health and well-being, and their ability to go to work and be safe,” Butler said.

But she was outmaneuvered by the Republicans who prevented the amendment from being offered.

Butler had no better luck with a proposal to increase the maximum benefit.

Arizona law says people who are fired or laid off due to no fault of their own are entitled to half of what they were making. Payments come from an account funded by a tax employers pay on the first $7,000 of each worker’s salary.

But the law caps benefits at $240 a week, a figure not adjusted since 2004. Only Mississippi pays less.

Her proposal would have set the maximum at $490.

By comparison, the cap is $450 in California, $492 in New Mexico, $560 in Utah and $597 in Colorado.

Rep. John Allen, R-Scottsdale, who led the successful effort to block consideration of the amendments, accused the Democrats of “grandstanding.”

“All it is is political posturing,” he said. “It’s tears for votes.”

Butler said her efforts would not have been necessary had the Republican majority heard the issues through the regular process. She added that the problems have only become more important.

“It’s not theatrics,” Butler said, citing the high jobless rate and the problems that the state has had handling the crush of applications.

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