“(Economic) decline tends to be self-reinforcing for a while – reduced production reduces employee and owner incomes and reduces employment, this reduces demand for goods and services, which causes another round of reduced production and so on,” said Thomas Traynor, dean and professor of economics with the Raj Soin College of Business at Wright State University.
A Honda employee works on compressor components for ventilators in Marysville. CONTRIBUTED
Local officials and economic experts hope the job losses are temporary, and employment will rebound soon after Gov. Mike DeWine’s stay-at-home order is lifted. But they fear the financial woes could linger, especially if the lockdown continues deeper into the year.
“Initial unemployment claims are at historic levels and quite worrisome,” said Diane Shannon, Dayton’s director of procurement, management and budget. “We hope that a large percentage of these claims are temporary and that many will be back to work when the health crisis subsides and stay-at-home orders are lifted.”
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The Great Recession officially started in December 2007 and ended in June 2009. The economic pain, however, was deep and lasted years.
In 2009, about 1.15 million Ohioans filed initial jobless claims, which was the highest total since 1982, according to the Ohio Department of Job and Family Services.
In the seven county region, 121,094 people filed new claims for unemployment in 2009.
But the coronavirus crisis has caused enormous payroll losses at breath-taking speed.
Since the week ending March 21, the state has received 110,555 initial unemployment claims from laid off workers in Butler, Champaign, Clark, Greene, Miami, Montgomery and Warren counties, according to Job and Family Services data.
Concern over income tax revenue from job losses in the state has the Ohio Municipal League pushing for Congress to include cities in a future COVID-19 relief package. FILE
That tally is 92% of the number of new jobless claims filed in the seven-county region in all of 2009, which was among the highest years for claims statewide in recent history.
New unemployment data should be released Thursday for the week ending April 11. Initial jobless claims in the region are likely to surpass 2009’s entire-year total.
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In the Dayton metro area, more than 59,250 laid-off workers have applied for unemployment benefits in the last month.
That far eclipses the number of new jobs that have been created in the metro area since the Great Recession.
Employment in the Dayton metro area (consisting of Montgomery, Miami and Greene counties) fell to a historic low of 358,600 workers in December 2009, according to the U.S. Bureau of Labor Statistics.
The recent payroll peak occurred in January of this year, when 393,800 people were employed.
But that means the local economy has added only 35,200 jobs from the low point. The Dayton region never fully recovered all of the jobs it lost leading up and during the national downturn.
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‘I fear big problems’
Though the number of new jobless claims is staggering, experts say it does not fully capture the true number of people who have been pushed out of work.
They say some people aren’t being counted because of processing delays, while other workers might not qualify for unemployment compensation.
Depending on how long this crisis lasts, job losses will mount and the unemployment rate will rise, likely significantly, and could remain elevated if businesses that don’t have enough cash to tide them over have to close permanently, said Marc Clauson, professor of history and law at Cedarville University.
Huge numbers of businesses have closed and some that remain open have had their supply chains cut off or compromised, impacting sales or operations, Clauson said.
Even when companies shut down and have no payrolls, they have to pay fixed costs, like rent, utilities and insurance, and without liquid assets (cash), they will be forced out of business, he said.
Traffic was backed up on Germantown Street Wednesday with people waiting to get into the Food Pantry. MARSHALL GORBYSTAFF
“You can tide workers over for a time, but money may run out. And even if it doesn’t will they have an employer to go back to?” he said. “If this goes until summer, I fear big problems.”
The unprecedented volume of jobs being lost each week shows that the production of goods and services has already fallen significantly, said Traynor, with Wright State.
Weekly initial jobless claims will continue to be higher than during earlier recessions at least for a while, though it is difficult to know how long that will last, Traynor said.
Initial unemployment claims in the region have declined for two consecutive weeks, but the number of ongoing claims continues to swell.
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Even if the rate of new job losses doesn’t remain at or near record highs, total employment in the region will continue to fall for weeks to come, Traynor said.
There will be more job losses, but how many depends on the course of the illness and whether further restrictions are imposed and the length of time it takes for Ohioans to begin returning to normal activities, Traynor said.
Other factors that will impact employment include improvements in the tracking and combating of the spread of the virus and the effectiveness of current and future government relief and stimulus packages, he said.
The Green Tokai company in Brookville lays off over 540 employees. MARSHALL GORBYSTAFF
Ohio’s unemployment rate was 5.5% in March, up from 4.1% in February, according to state data released Friday, but economists say it doesn’t capture the job losses late in the month and they predict April’s jobless rate will spike.
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Between initial and continued unemployment claims, the unemployment rate of covered employment — meaning people eligible for jobless benefits — in the Dayton metro area is likely about 14.2%, said Richard Stock, director of the Business Research Group at the University of Dayton.
But given all the people who don’t qualify for unemployment compensation and the backlog in claims, the actual rate is likely greater than 20% locally, he said.
"We know that percent will continue to increase across April because we have not seen all the damage locally yet that we would expect to see," Stock said, adding that the layoff of employees at Green Tokai in Brookville offers a glimpse of what is starting to happen in the manufacturing sector.