PIERRE, S.D. (KELO) — Filings for unemployment are increasing and Gov. Kristi Noem said today the state is adjusting.
Noem said an additional 16 people are working for the South Dakota Department of Labor to help with unemployment filings. The state has also added at least 23 more telephone lines to help.
Many of those filing are doing so for the first time, Noem said. “These are people who are used to getting up for work each day” but now, don’t have the job because of COVID-19, she said.
The state and federal government have responded with unemployment opportunities for workers who have lost jobs or reduced hours because of COVID-19.
Initial unemployment claims in the nation increased by 70,000 during the week ending March 14, a news release from the U.S. Department of Labor said. The advance initial claims reached 281,000 up from 211,000 in the prior week. It was the highest level for initial claims since the 299,000 reached on Sept. 2, 2017, the DOL said. The numbers are seasonally adjusted figures.
“So much of the economy has already been significantly impacted,” Noem said of COVID-19’s impact on the workforce and business.
Noem said on Monday the state had received about 185 claims in a short period of days.
The DOL said in its advance report for the week ending March 14 that initial advance claims in South Dakota were down by 16 claims from the prior week. The state had 169 initial claims for the week ending March 14 compared to 185 in the prior week. But, the DOL said, advance claims are those reported by the state liable for the claim and the prior week is tied to the claimants’ state of residence.
Unemployment trends are likely to increase over the next weeks, even months, as Noem and others predicted the peak of COVID-19 is several weeks ahead.
Noem said Tuesday the state has hotels with normal occupancy rates of 100% that have dropped to almost nothing.
Businesses in those types of industries are among those at the highest risk because of COVID-19.
South Dakota has 47,700 people specifically employed in the leisure and hospitality fields, according to the South Dakota Retailers Association. Another 52,400 of those people were employed in retail trades.
Motels have reduced hours across the state, some bars and restaurants have switched to take out or delivery only and some retailers have closed.
Goldman Sachs said in a March 20 economic report said that COVID-19 has caused an abrupt disruption in cash flow for businesses which has forced them to immediately lay off workers is one reason for the expected spike in unemployment.
The Brookings Institute lists the leisure and hospitality industry in the top five industries most likely at risk with COVID-19. The at-risk means those industries will likely have shutdowns, layoffs, and experience other factors from COVID-19.
If businesses such as retailers, hotels and bars and restaurants are experiencing an economic downtown the effect will trickle down to state government and for example, the city of Sioux Falls.
Sales, use, and tourism taxes are key revenue portions of the state budget. City sales taxes are also key to the budget and capital budget for the city of Sioux Falls.
The Goldman Sachs’ report also said that it expects the national overall unemployment rate to climb from 3.5% to 9% over the next couple for quarters.
South Dakota’s unemployment rate was 3.3% in February 2020, according to the South Dakota Department of Labor.
The January unemployment rate for the Sioux Falls Metropolitan Area was 2.7%, according to the SDDL January was the most recent rate available. The rate was 3.4% for the Rapid City Metropolitan area.
The 2020 rates were slightly higher than in 2019. The state had an unemployment rate of 3.1% in February 2019. The Sioux Falls area’s unemployment rate was 2.5% in January 2019. Rapid City’s was 3.1%.