Commonalities Among the Top 30 Virginia Counties with the Highest Unemployment Claims

The number of unemployment insurance claims in Virginia has soared at a record pace amid COVID-19. Virginia Employment Commission (VEC) reported a total of 565,979 initial unemployment claims in the most recent six weeks, ending April 25th.[1] According to the VEC, initial claims peaked during the April 4th filing week, although additional claims continue to enter the system.[1]

Map 1. Initial Unemployment Insurance Claims per 1,000 capita in Virginia

Source: Virginia Employment Commission (VEC).[1]

Map 1 shows the distribution of initial claims per 1,000 people reported in the last six weeks. The claims per 1,000 people ranged from 1.6 to 144.8, and the median claim number of the counties is 49.7. Bath County got hit the hardest with 144.8 unemployment claims per 1,000 residents due to closures of its two major employers, the Omni Homestead Resort and the Greenbrier Resort.[2] It is followed by the independent cities of Covington (143.9), Petersburg (118.7), Danville (104.9), and James City County (97.1).

The unemployment claims show a slightly different trend compared to the previous forecast based on the most vulnerable industries and their job shares (Link: https://blogs.lt.vt.edu/economicdevelopment/disparate-impact-of-covid-19-across-virginia/). One possible reason for the difference could be due to the fact that COVID-19 has hit industries and regions at different paces. Some have faced rapid, short-term shock while others will have to deal with slow and long-term impacts. It is difficult to verify the reason at this point because industry-specific unemployment claims data is not yet fully available.

Although we cannot come to a conclusion until more detailed data is published, we can glean some insights by looking into the industry compositions of hardest-hit regions. The Virginia Tech Office of Economic Development explored the top 30 Virginia counties with the highest initial unemployment claims since mid-March. We found a few common themes across them. More than half of the top 30 counties have job shares higher than Virginia in 1) Accommodation and food services (18 out of 30 counties), 2) Retail trade (23 out of 30 counties), 3) Manufacturing (18 out of 30 counties), and 4) Health care and social assistance (18 out of 30 counties).

It is not surprising that the accommodation and food services sector accounts for a large portion of unemployment due to COVID-19 considering that restaurants and bars are closed and nonessential travel is not recommended. Meanwhile, focus on increasing grocery sales and online shipping might have overshadowed risks to the larger industry. Brookings points out that more than 88% of retail sales are still at brick-and-mortar stores, and they are facing a massive downturn because of the reduced foot traffic and nonessential spending.[3]

Table 1. Top 30 counties and high job share industries

Source: Emsi Developer[4]

Many of the top counties have manufacturing-dependent economies, contrary to previous projections that manufacturing would take a low or modest cut[5]. PwC points out that manufacturing is especially vulnerable due to its active and close-quarters worker environment that cannot transition to remote work.[6] For instance, a large portion of unemployment claims from localities like Covington, Hopewell, and Danville is due to closure of Goodyear Tire & Rubber, the largest manufacturing employer of the region which shut down its plant in March.[7]

Health care and social assistance is an even more counterintuitive sector than manufacturing at a glance. However, the industry faces a sharp decline in revenue due to delayed or canceled voluntary surgeries and other non-emergency visits, all of which leads to increased pay cuts and layoffs for healthcare workers in areas less affected by Coronavirus.[8]

Some industries have considerably lower shares in the top counties. 90% of the top 30 worst-hit counties have job shares lower than Virginia in 1) Information, 2) Professional, scientific, and technical services, and 3) Management of companies and enterprises. Those are jobs traditionally regarded as white-collar and expected to be more slowly affected than the other sectors.

Table 2. Top 30 counties and low job share industries

Source: Emsi Developer [4]

With the COVID-19 pandemic being such an unprecedented event in our recent history, it is difficult to draw clear, cause and effect relationships or account for all of the variables present in this circumstance. However, better understanding common themes or traits among those hardest hit economies helps us to shed light on areas for further analysis as well as considerations for addressing these challenges in the future.

Link for the full data of the top 30 counties’ industrial composition: https://docs.google.com/spreadsheets/d/1kNnCKvGGeTfkkBDNmjUrWOxGiGd7cpufF1DlCKP1pw8/edit?usp=sharing

 

[1] Virginia Employment Commission. April 30, 2020. Virginia’s Unemployment Insurance Weekly Claims. Retrieved from: https://www.vec.virginia.gov/node/11884

[2] Kate Andrews. April 30, 2020. Bath County hit hard by resort closures. Virginia Business. Retrieved from: https://www.virginiabusiness.com/article/bath-county-hit-hard-by-resort-closures/

[3] Tracy Hadden Loh. March 24, 2020. COVID-19 will upend retail, but there are steps we can take to save it. Brookings. Retrieved from: https://www.brookings.edu/blog/the-avenue/2020/03/24/covid-19-will-upend-retail-but-there-are-steps-we-can-take-to-save-it

[4] Emsi developer. 2020, 4.

[5] Mark Muro, Robert Maxim, and Jacob Whiton. March 17, 2020. The places a COVID-19 recession will likely hit hardest. Brookings. Retrieved from: https://www.brookings.edu/blog/the-avenue/2020/03/17/the-places-a-covid-19-recession-will-likely-hit-hardest

[6] PwC. No date. COVID-19: What it means for industrial manufacturing. Retrieved from: https://www.pwc.com/us/en/library/covid-19/coronavirus-impacts-industrial-manufacturing.html

[7] Ned Oliver. April 2, 2020. As unemployment claims soar, where are Virginia workers getting hit hardest?. Virginia Mercury. Retrieved from: https://www.virginiamercury.com/2020/04/02/as-unemployment-claims-continue-to-spike-where-are-virginia-workers-getting-hit-hardest-by-layoffs/

[8] Michael Sainato. April 14, 2020. US for-profit healthcare sector cuts thousands of jobs as pandemic rages. The Guardian. Retrieved from: https://www.theguardian.com/us-news/2020/apr/14/healthcare-job-cuts-coronavirus-worker-layoffs

Hye-jeong Seo

Graduate Assistant at Virginia Tech Office of Economic Development Ph.D. Student in Planning, Governance, and Globalization (PGG) at Virginia Tech 

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