The South’s worst unemployment numbers may be yet to come given social distancing delays in the region
The first set of data on unemployment insurance claims amid the coronavirus pandemic were unprecedented, but the hardest-hit areas were not generally states in the South. A second week of data shows a portrait of a disaster, with 6.6 million people filing for unemployment insurance (UI) in the week ending March 28. Every single state has now reported a record number of claims during one of those two weeks.
Some Southern states were particularly hard hit, with North Carolina, Alabama, and Louisiana all ranking among the five states with the largest two-week percent increase in UI claims. But since the most recent data is from the week ending March 28, the greatest spike in the South’s unemployment may be yet to come. That’s because there is strong evidence that much of the South (and broad swaths of the West) was not engaging in widespread social distancing by that week.
Many Southern policymakers were slow to accept that stopping the pandemic required social distancing, closing schools and nonessential businesses, and limiting public gatherings. Stay-at-home orders have only begun to ramp up in Southern states in recent days, and some Southern states still don’t have them. For many businesses, layoffs and closures will take place only as these necessary public health measures are implemented and the general public follows suit. Some of the Southern states that saw the largest increases in unemployment claims for the week ending March 28 were those that instituted stay-at-home orders earlier than others, like Kentucky and Louisiana. This suggests that the largest unemployment claims in many Southern states have yet to materialize.
Further, it is only now, in the wake of the CARES Act’s passage, that some Southern states are waiving stringent eligibility requirements for unemployment benefits. This means that the early UI claims are the ones that made it through more onerous eligibility requirements, and as more Southern states loosen their eligibility requirements, more claims will be filed.
The failure of many Southern governors to quickly institute necessary public health measures will likely have disastrous effects, and the South’s economic and social conditions leave it particularly vulnerable to the coronavirus pandemics’ dual health and economic crises. COVID-19 hits those with underlying health conditions hardest, and people in the South—where rates of chronic conditions such as high blood pressure, diabetes, and cardiovascular disease are especially high—are particularly at risk. An overreliance on employer-provided health insurance and inadequate access to health care due to the failure of many Southern states to expand Medicaid create further inequities.
These decisions mean that the economic effects of the pandemic are going to be felt a bit later, and many Southern states are only beginning to see the damage show up in unemployment claims data. As states that instituted timelier public health measures are possibly able to bring their economies back in the coming months, Southern states will continue to be a drag on the U.S. economy.