Coronavirus
Kansas unemployment claims soar 600% as COVID-19 sends economy into tailspin
Unemployment claims in Kansas have soared more than 600% in one week as the coronavirus slows or shuts down large swaths of the state economy.
“We are in uncharted waters right now,” Kansas Labor Secretary Delía García said Friday.
At least 11,355 claims were filed this week, García said, up from 1,820 claims last week.
The massive jump suggests employers across the state are already moving to layoff workers as reported cases of the coronavirus mount. Kansas is experiencing “substantial increases” in claims every day, García said.
Before the pandemic, Kansas had been enjoying low levels of unemployment. The state’s seasonally-adjusted rate was 3.1% in January, the latest month for which data is available. In 2019, Kansas added more than 7,000 private sector jobs.
But the coronavirus appears almost certain to plunge the nation – and Kansas – into a recession.
The state was already facing economic headwinds after Spirit AeroSystems, one of Wichita’s largest employers, laid off 2,800 people earlier this year as the Boeing 737 Max remains grounded. The company manufactures the plane’s fuselage.
Now, the extraordinary restrictions imposed in the past few days to slow the virus’s spread – limiting gatherings in many places to 10 or fewer, closing restaurants to dine-in service – are having a severe impact on businesses.
Workers, especially in the hospitality and restaurant industry, may find themselves with diminished hours or out of jobs altogether.
“While our top priority is to keep Kansans safe and healthy, there’s no question that these major disruptions to our daily lives pose a serious economic threat to Kansas businesses and workers,” Gov. Laura Kelly said.
Kelly and top officials from her administration on Friday rolled out a package of economic assistance programs to aid businesses.
The state has applied for small business disaster loans from the federal government and is expected to receive approval by Saturday. That would open up loans of up to $2 million to small businesses.
The Kansas Commerce Department also announced a rapid-loan fund of up to $6.3 million that communities will able to dispense to local businesses in as little as two days.
The Commerce Department is creating a relief fund for the hospitality industry that will make $20,000 loans available to qualifying businesses. The fund will contain $5 million.
“We feel that these loans funds can be a stabilizing force for this critical sector of the Kansas economy,” Commerce Secretary David Toland said.
Chuck Magerl, owner of Free State Brewing in Lawrence, said the “stunning downturn has taken an immense toll” on businesses across the state. He said the initiatives announced by Kelly’s administration wouldn’t be enough on their own to ensure businesses can continue to operate, “certainly are steps to keep the important hospitality industry on a pathway to possibilities.”
On Friday, Kansas Bank Commissioner David Herndon also sought to reassurance Kansans that their money remains safe. Herndon said there are no reported instances of people making large cash withdrawals, but said banks have received calls asking if cash is available.
“In some cases, there have been people taking out more than they normally would to just to have some cash available in their home vs. in their bank account,” Herndon said. “But bank accounts are still active, deposit accounts, ATM cards and ATM machines and debit cards are still working just as they have in the past and they will continue do so.”
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