Colorado had more than 19,000 unemployment claims last week, a 737% increase from the previous week, as businesses laid off workers amid the widespread economic shutdown because of the coronavirus, the U.S. Labor Department said Thursday.
The state labor department reported more than 25,000 claims last week, up from 1,325 the previous week, in a state where companies very recently struggled to find workers in a booming economy. Nationwide, nearly 3.3 million Americans applied for benefits last week, almost five times the previous record set in 1982.
Gov. Jared Polis’ orders to close thousands of non-essential businesses, Colorado’s ski resorts in peak season, and in-house service at thousands of restaurants and bars are designed to reduce the coronavirus transmission rate. That accelerated Colorado’s unemployment claims, especially in the food and hospitality industries. A statewide shelter-in-place order that went into effect Thursday will likely increase unemployment claims going forward.
“As a former business owner, I know that this will be devastating news to workers and small business owners across our state. But the economic impact of the COVID-19 crisis will be longer and more severe if we don’t do everything we can to slow the spread of the virus,” Polis said in an emailed message to Colorado residents after he issued the statewide order late Wednesday.
As bad as Colorado’s new unemployment figures may turn out to be, they probably do not fully capture the scope of those out of work because the state is struggling to accommodate demand for unemployment insurance claims.
The surge in claims temporarily jammed the application webpage at the Colorado Department of Labor and Employment this week. The department is now asking claim seekers to apply on different days of the week depending on the first letter of their last name to prevent the site from being overwhelmed.
A Colorado Chamber of Commerce survey of its members made public this week suggested that nearly a quarter of firms with 50 or fewer workers fear going out of business if the economic crisis persists. An estimated 80% of firms with 250 to 1,000 workers reported being concerned about being forced to temporarily close their operations.
And a March 16 economic forecast issued by the governor’s budget office said that there might be an increasing risk of recession triggered by extended business closures despite the fact that the state’s economic was expanding before the pandemic hit.
State lawmakers warn that almost certainly reduced state revenue from corporate and personal income taxes could portend trouble for the state’s upcoming budget and for public school funding. Severance tax collections from oil and natural gas companies were already decreasing because of low global oil prices and falling domestic demand caused by the pandemic.
Anticipating mass layoffs, Polis, a Democrat, has encouraged small firms to apply for low-interest emergency loans of up to $2 million from the U.S. Small Business Administration. He directed state agencies to expedite unemployment claims and to guarantee state-funded temporary paid sick leave for all Colorado workers. The sick leave is an incentive for workers to go home if they get sick without fearing for their jobs and infecting co-workers. It allows them to recover at home and more quickly return to the workforce.
Colorado’s unemployment rate in January was 2.5%, according to the latest monthly data from the state labor department. Total employment was more than 3.1 million for that month in the state of nearly 5.8 million people.
For most people, the coronavirus causes mild or moderate symptoms, such as fever and cough that clear up in two to three weeks. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia and death. The vast majority of people recover.
More than 1,430 people in Colorado have tested positive and at least 24 have died.
In other developments:
— The state will start testing 7,500 health care workers and first responders next week using kits provided by the U.S. Department of Health and Human Services, state emergency operations center director Mike Willis said. Officials are looking at ways to conduct mass testing of the general public and said rapid blood testing underway in the Telluride ski resort area is among options under consideration, Willis said.
— Mesa Verde National Park joined other national parks in closing because of the outbreak. The decision announced Wednesday night was made in response to guidance from local health officials.
— State oil and gas regulators decided Wednesday to temporarily stop work on new rules mandated by state lawmakers to prioritize protecting public health, safety, the environment and wildlife. Regulators decided the rules were too important to be developed in virtual meetings, The Daily Sentinel reported. The Colorado Oil and Gas Conservation Commission said it would continue issuing new drilling permits.