COVID-19

New jobless claims down 35% in New Mexico

By Teya Vitu
The New Mexican
Posted 5/20/20

Has the first wave of massive unemployment claims begun to subside?

New Mexico saw a 35 percent drop in initial unemployment claims for the week ending May 9, according to the U.S. Department of Labor.

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COVID-19

New jobless claims down 35% in New Mexico

Posted

Has the first wave of massive unemployment claims begun to subside?

New Mexico saw a 35 percent drop in initial unemployment claims for the week ending May 9, according to the U.S. Department of Labor.

Initial regular unemployment claims tumbled from 13,675 to 8,850 in the most recent reporting period, the first time filings for state unemployment benefits dropped below 10,000 since mass layoffs due to novel coronavirus business closings started the week of March 13.

Unemployment filings peaked at 31,849 the week of March 20, but had settled in the 13,000s in the three weeks since April 10, according to Labor Department and New Mexico Department of Workforce Solutions statistics.

"I think it is the result of businesses more or less finished laying people off and actually are hiring back," said Silas Peterson, owner of The Hire Firm, a Santa Fe employee staffing company. "I believe the PPP loan has allowed business to hire people back. But the PPP time horizon is so short. When that horizon ends, there could be a new wave."

The Small Business Administration reported the federal Paycheck Protection Program approved 18,278 loans to New Mexico businesses that are forgivable if businesses keep employees for eight weeks. That is the "time horizon" Peterson is referenced.

New Mexico's unemployment rate for the week ending May 2, the most recent available, was 11.98 percent, the Labor Department reported.

"A lot of the initial claims were due to our most vulnerable industries [hospitality and restaurants]," said Reilly White, associate professor of finance at the University of New Mexico. "We saw a lot of this happen immediately."

Workforce Solutions reported at Gov. Michelle Lujan Grisham's news conference Wednesday that 117,190 were receiving unemployment benefits.

Far fewer self-employed also applied in the second week of eligibility for the federally funded Pandemic Unemployment Assistance that became available April 26 in New Mexico. The first week saw 17,850 applications from the self-employed, contractors and gig economy workers, while the second week ending May 9 had 4,670 applications, according to Labor Department statistics.

The governor on Wednesday (May 13) announced many nonessential businesses could reopen Saturday (May 16) with a limited occupancy of 25 percent of maximum allowed by fire code. This does not include restaurants, gyms, hair salons and malls, which Lujan Grisham said will be reconsidered for reopening in early June.

But White is uncertain how much the return of most retail will positively affect unemployment numbers.

"Our customer behavior has not come back the same way," White said. "Retail [in other states that have reopened] is dealing with much lower traffic loads."

White warned that New Mexico could see a second wave of surging unemployment gains depending on what happens with office workers, business services, financial services and potential government layoffs.

"I think we will see a large increase in this if the recession continues," White said.

Under fire from unhappy callers, Workforce Solutions has struggled with aging technology and an overwhelmed call center in the first two months of surging unemployment claims. Callers have dialed for hours to get through to the agency, which has added additional people from other state departments to answer phones.

"We get thousands of calls every day," Lujan Grisham said at Wednesday's news conference. "We are going to keep the staff reassigned to Workforce Solutions until we are caught up. I am not satisfied that we are getting to those calls quick enough."

Workforce Solutions has also updated its filing system and also created a new system to accept the self-employed applications, which are federally funded and are dealt with separately.

"We are still doing better [than earlier in March and April]," Lujan Grisham said. "We are not done. We made a lot of software modifications."

This story first published in the Santa Fe New Mexican, a sibling publication of Taos News.

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