$10.6 million in unemployment claims paid last week

Nearly 42,000 Iowans filed for initial unemployment benefits

Nearly 42,000 Iowans last week filed for initial unemployment benefits, one-third of which were from the restaurant, bar and lodging industries, according to newly released data from Iowa Workforce Development.

Jessica Dunker, Iowa Restaurant Association president and CEO, expects the unemployment claims to be even higher next week.

Restaurants and bars were ordered closed by Iowa Gov. Kim Reynolds on March 17. Many newly jobless workers likely didn’t file a claim last week for a variety of reasons including their employer may have paid them through the week, Dunker said.

“Next week’s unemployment figures are going to be a lot more telling,” she said.

The new unemployment filings are the first look at how the statewide shutdown of thousands of Iowa businesses in an effort to slow the spread of the novel coronavirus is affecting the state’s economy.

Nationally, 3.28 million new unemployment claims were filed last week, up 3 million from the previous week. The number of initial seasonally adjusted claims filed last week are a high-water mark for the country, according to the U.S. Department of Labor release. The previous high was 695,000 new claims filed during a week in October 1992. 

The 41,890 new unemployment claims filed in the week that ended on Saturday eclipses the 2,229 filed the previous week. The number of new unemployment claims was the highest weekly total since at least 2000, state data shows.

During the Great Recession, the highest number of new claims filed occurred the week ending Dec. 27, 2008, when 13,865 were filed.

Iowa last week paid unemployment claims that totaled more than $10.6 million, according to Iowa Workforce Development. The state’s unemployment trust fund held $1.2 billion at the beginning of January, enough to last about 18 months, according to a U.S. Department of Labor analysis.

According to Iowa Workforce Development data, more than 300,785 Iowans were employed in three industries hardest hit by the closures: restaurants and bars, hotel and leisure, and retail.
An Iowa Restaurant Association survey of its members showed that 82% of restaurants and bars have laid off employees. In addition, revenues are down 84% when compared to a year ago.

Dunker is estimating that up to 20% of the state’s more than 6,000 restaurants and bars, or about 1,000 establishments, will be unable to reopen once Reynolds’ closure order is lifted.

“A lot of these operators, especially in rural Iowa, can’t last very long in this kind of downturn even if you lay off all of your employees,” Dunker said. “They have to pay their leases, their electricity, for their products.”

Dunker said she’s hopeful the nearly $2 trillion federal stimulus bill and steps Iowa is taking to help the hospitality industry will help. But it may not be enough – or soon enough – to help some businesses, she said.

Reynolds’ closure order runs through March 31. Dunker said that while the association “hasn’t been told businesses can’t reopen on April 1 we won’t be surprised if it is extended.”
When business do reopen, however, Dunker said managers and other restaurant and bar workers may not be available to rehire.

“Before this happened, our businesses were having a difficult time finding workers,” she said. “There are other segments of the economy that are hiring and many of our people have mortgages to pay and need to support their families. They may find other jobs.

“The question will be ‘will those managers and others be there for us to hire back or will they be absorbed in other industry segments?’ ”

Highlights from association survey

The following are highlights from the Iowa Restaurant Association survey of 670 operators:
35% of hospitality establishments are closed
91% of bars are closed
82% of restaurants and bars have laid off workers
84% decline in revenue in all hospitality categories