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Texas unemployment claims jump 860% in a week amid coronavirus pandemic

How to apply for unemployment amid coronavirus concerns
How to apply for unemployment amid coronavirus concerns

HOUSTON – Data just released by the U.S. Department of Labor show the estimated number of unemployment claims in Texas jumped from 16,176 the week of March 14 to 155,657 the week of March 20 which is an 862% increase.

"I know so many people that have their own businesses right now, that we don't know what's going to happen," said Carol Reed, who owns an event planning business.

When asked when Reed started losing business, she replied, “immediately because we couldn’t book any venues."

How much has her business lost so far?

“Maybe $20,000 to $30,000,” said Reed.

The hospitality industry has been hit particularly hard by the crisis. The Bureau of Labor Statistics estimates 262,088 Texans work in food and beverage alone, with an average annual wage of $20,306.11. Many in the industry live paycheck-to-paycheck.

“One event helps pay for another event, which helps pay for another event, which keeps me going throughout the year," Reed said. “We’re at a standstill, we can’t plan anything.”

Instructional Assistant Professor Arlene Ramirez with the University of Houston’s College of Hotel and Restaurant Management said thousands more furloughs are likely as restaurants pare down to takeout or drive-thru only and hotels see occupancy rates drop due to canceled conventions and lack of travel.

“We know this is a temporary thing and we will be bringing employees back. Will we be bringing every employee back? That really depends on the business level of the hotels,” Ramirez said. “It really depends on the owner and how strong their balance sheet is, how much cash they have.”

There is one silver lining in the hospitality industry, according to Ramirez.

“One of the things about hospitality is there is cross-over in other areas,” she said.

Healthcare businesses, grocery stores, big-box stores and online retailers are all hiring to meet increased demand. Ramirez suggests that those who lost their jobs look to these areas for employment.

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Another industry feeling the pinch is energy. According to federal government data, 76,088 Texans have jobs in oil and gas extraction or chemical manufacturing.

"A lot of companies in Houston are service companies. Pumping services, well services, production services and those are always the first ones to get cut," said energy industry analyst Bob Cavnar.

Cavnar said COVID-19 is causing a decrease in demand and a price war between Russia and Saudi Arabia has crude prices hovering at little more than $20 a barrel. At those prices, many companies go into what Cavnar calls “hibernation.”

“Everybody I’m talking to is just saying they’re laying the rigs down, they’re just going to wait for prices to come back,” said Cavnar. “Once you get crude kind of back over $30 a barrel or so, the industry will start coming alive. Then, it will become active somewhere in the $40s."

To help with rising unemployment, Governor Greg Abbott sent a letter to the Department of Labor, asking for access to interest free federal loans and an accelerated release of funds from the federal unemployment trust fund to help cover rising claims.

“It’s a difficult time, but we’re going to make it through it because we’re strong people,” said Reed.