Despite gains, Pike County rate remains second lowest in state
The effects of COVID-19 on the economy and the unemployment rate continued to be revealed on Friday as Alabama reported near record high jobless rates.
Alabama’s unemployment rate jumped to 12.9% in April during the economic shutdown linked to the coronavirus pandemic, the worst in nearly 37 years, the state said Friday.
Department of Labor statistics showed nearly 217,000 people lost their jobs from March to April, leaving 283,787 people without work statewide.
“If there is a silver lining to any of this, it’s that Pike County has the number two lowest unemployment rate in the state,” said Troy Mayor Jason Reeves.
Geneva County in rural south Alabama had the state’s lowest unemployment rate at 8.1%. But a state-high 26% of people are out of work in Lowndes County, just west of Montgomery.
Pike County, at 9.1 percent unemployment, tied with Bullock County for second lowest in the state.
The April rate was up from 3% just one month earlier, but it wasn’t as bad as the state’s all-time high. State records dating to 1976 show Alabama’s worst-ever jobless rate was 15.5% in December 1982, and historical accounts say state unemployment exceeded 20% during the Great Depression.
State Rep. Wes Allen (R-Troy) said the unemployment numbers should be temporary as most restrictions on businesses have been lifted by the governor and the vast majority of people should be able to return to work now.
“The Wuhan virus has caused great hardships and some of those hardships were worsened by parts of the federal stimulus package,” Allen said. “The intent of the federal stimulus was to provide a soft landing to those who became suddenly unemployed as a result of the Wuhan Virus.”
The worst cuts last month were in the leisure and hospitality industry, where 79,500 people lost their jobs in places like restaurants and hotels. About 29,500 people lost positions in professional services; the education and health services sector shed 26,400 jobs; and manufacturing lost 24,200 jobs.
“We knew we were going to be hit hard (by unemployment),” Reeves said. “But the diversity in our industry and the types of jobs we have in our economy allowed us to not fall as far behind as others.”
Pike County’s unemployment rate was 2.9 percent in February. With an economy heavily dependent on transportation, defense and manufacturing, food production, health care and education, Reeves said Pike County did not see the significant job losses that some areas heavily depended on hospitality or leisure services might have seen.
“Much of economy is diversified and much is also considered essential,” he said. “It doesn’t take the sting out of what we’ve been through, but it’s better to come back when you don’t have as far to go.”
Reeves said it is important to remember that the numbers reflect people who are struggling.
“We still know there are people out there who are hurting and looking for work,” he said. “And I’m optimistic we are going to able to rebuild our economy in a safe way … I think it says a lot out our employees, our citizens and our businesses that they have been able to continue to move forward.”
Under the CARES Act, the federal government expanded the scope of unemployment insurance to pay more money for a longer period of time. The amount and length of pay varies by state but the CARES Act added an additional 13 weeks to every state’s maximum pay period.
As long as a person is eligible to receive benefits, he or she can receive an additional $600 a week on top of the regular benefits until July 31. In Alabama, the unemployment benefits top at $275 bringing the total benefits to as much at $875 a week.
Allen said it is unfortunate, in some circumstances, that the stimulus package made it so that some people who are unemployed are now making more money than they earned while they were employed.
“That is not good for the workforce or the taxpayer,” he said. “Those individuals who find it more financially beneficial to stay home than to return to work will soon find that gravy train ending which will be a positive thing for the taxpayers and for our economy.”
State Sen. Jimmy Holley said the federal unemployment plan that was implemented could have been better thought out.
“When a situation is created where people earn more not working than they do working, then you have a problem,” Holley said. “I’ve seen a lot of ‘hiring’ signs at restaurants so there is a pent-up need for people to go back to work.”
Holley said it is most important for businesses to be open and for people to get back to work.
“I will be anxious to see the next unemployment rates,” he said. “Hopefully, they will show people are back a work.”
Bo and Natalie Lankford, owners of Julia’s Restaurant in Troy are transitioning from a buffet to a cafeteria style restaurant now that buffets are not permitted.
The Lankfords agreed that unemployed workers will be hesitant to return to work when the benefits exceed what they were making.
“But, what they might not know is that they will be taxed on the additional money they receive and that could make a difference in whether they want to come back to work,” Bo Lankford said.
The Lankfords said locally owned restaurants are making the changes necessary to stay in business and they are depending on their employees coming back to work so they can stay in business.
Vijay Nagpal, general manger Santa Fe, Troy, said having the restaurant’s employees back at work is most important in this time of transition.
“We needed our employees before and we need them now,” Nagpal said. “If they don’t come back to work, then we are to report that we offered them their jobs back and they refused. That is our responsibility.”
Nagpal said it is important for people to work together to bring the economy back up. “Most everybody will have to make some sacrifices if we want things be better for all of us.”