By Paul Roberts

The Seattle Times

This week marks a traumatic anniversary for many Washingtonians: One year ago, the state reported the first big wave of jobless claims as the economy shut down under COVID-19.

The report showed that Washingtonians had filed 128,962 new, or “initial,” claims for unemployment insurance with the state Employment Security Department (ESD) the prior week.

The report was among the first solid indicators of the economic price Washington would pay for COVID-19. In that one week — for March 15-21, or Week 11 of 2020 — Washingtonians had filed five times the number of jobless claims as were filed during the worst week of the Great Recession in December 2008.

And there were plenty of signs that Week 11 would itself be surpassed.

As state officials scrambled to pay out unemployment benefits, many of Washington’s rapidly growing army of newly jobless workers feared the worst.

South Seattle resident Robert Jacobs, 65, who had just been laid off as a substitute teacher, remembers being stunned by media accounts of the job losses. “OK,” he told himself. “We’re in for the long haul here.”

Many economists expected the job losses to continue, though there was little consensus over the ultimate tally — largely because no country had shut down its economy before.

“Although we knew this would be catastrophic for the economy in historical terms, it was impossible to get a very accurate assessment in terms of [claims] numbers,” Paul Turek, ESD’s state economist, said this week.

In fact, in the months before the first big layoffs, some experts hadn’t been focused on the prospects for major job losses in Washington. Instead, in January and early February, as COVID-19 disrupted shipping from China, the economic impacts were seen “more in terms of trade and supply chain impacts than in terms of local labor shocks,” recalls Anneliese Vance-Sherman, an ESD regional economist who covers the Seattle area.

Even by mid-February, local economic impacts seemed confined to things like shortages of spare parts.

But after Feb. 28, when King County recorded what was thought to be the first U.S. death due to COVID-19, the job market picture began to come into sharp focus.

In the space of a week, King County recommended employees work at home and Microsoft, Amazon and several other big employers were allowing or requiring Seattle-area employees to work remotely.

By the second week of March, mass layoffs were already beginning at companies across the state, and that trend accelerated after Gov. Jay Inslee ordered the closure of all nonessential business locations on March 23. That same day, Boeing announced it would temporarily suspend Puget Sound operations.

On March 19, the ESD reported the first uptick in jobless claims — 14,154 — for the prior week. That was almost three times what they’d been for Week 10 of 2019.

A week later, as the ESD reported the first big claims numbers — 133,464 (later revised to the current figure of 128,962) — it was clear the state’s job market had moved into uncharted waters.

“The velocity and volume of the impact of COVID-19 has created a crisis that is unprecedented in the history of the program — going back to the 1930s when it was established,” said then-ESD Commissioner Suzi LeVine in a March 26 statement.

The crisis was just getting started. Week 11’s claims represented layoffs that had come before Inslee’s March 23 stay-at-home order, meaning a much larger wave was still to come.

“We haven’t seen the worst of it yet,” warned University of Washington economist Jacob Vigdor in an email from March 26, 2020.

Indeed, a week later, the state reported 181,975 new claims for Week 12, followed by 170,063, and 143,241. (All claims data represent revised figures.)

Claims dipped briefly in Week 15 (April 12-18), to 82,435. But they climbed to 137,605 the next week as tens of thousands of “gig” workers, contractors and other workers normally ineligible for unemployment benefits filed claims for newly created federal pandemic benefits.

By April, Washington had lost 410,000 jobs, or 16.5% of the state’s workforce. In February, by comparison, the unemployment rate had been 3.8%.

The weekly jobless claims reports became a grim ritual, the job market equivalent of COVID-19 case counts.

“You’d see the claims data come in, and see friends changing their LinkedIn status that evening,” recalls Mason Luvera, spokesperson for the Bellevue Downtown Association. “It was demoralizing.”

As the claims piled in, patterns emerged that hinted at how unevenly the economic damage was falling, as many in-person jobs disappeared while many office-based jobs simply went home.

Of the 1.2 million initial claims filed in the first 10 weeks of pandemic-related job losses, roughly one in 12 came from construction workers; one in 11 from workers in retail; and one in nine from food service and accommodation.

By contrast, fewer than 2% of claims filed in that 10-week period came from workers at tech companies.

Layoffs also tilted younger and lower wage. As Vance-Sherman told The Seattle Times in late March, losses had been heavy in sectors such as accommodation and food-service jobs, which “tend to be dominated by young people … making their first steps into the workforce.”

Claims were also disproportionately heavy in downtown cores, where commercial activity “came to a sudden and screeching halt,” recalled Jon Scholes, president and CEO of the Downtown Seattle Association.

As it did in other states, week after week of claims quickly overwhelmed the ESD, which struggled to process claims from what grew to include more than a million jobless Washingtonians who were paid more than $16 billion in benefits.

The tsunami of claims also enabled criminals to file tens of thousands of bogus claims in what was eventually disclosed as a $600 million fraud.

A year later, most of that tsunami has receded. The most recent weekly claims report — Week 11, but for 2021 — shows 11,398 new claims, a tiny fraction of the number reported a year ago. The state economy added 24,500 jobs in February, and unemployment was 5.6%.

Still, the damage is far from repaired. Last week’s new claims are roughly double the number for the same week in 2019. The state’s labor force still had 124,600 fewer jobs in February than it did a year earlier, before the pandemic started.

And one reason the unemployment rate is as low as it is, says the UW’s Vigdor, is that many jobless workers have simply stopped looking for work. The state’s so-called labor force participation rate is at the lowest level recorded since 1976, Vigdor says.

He likens the situation to “flood victims who survive the storm and go back to their homes when the waters have receded and it’s a complete mess.”

“The worst is over,” he adds. “But we’ve got a hard road back.”