Nebraska’s new initial unemployment claims are starting to taper off
For the week of June 6, 2020, an additional 4,697 Nebraskans filed for unemployment. This new data takes the total of unemployment claims up to 138,091 in Nebraska since COVID-19 restrictions were put in place.
While there was a major surge in mid-March to early-April as the economy began to slow down, that trend has started to become more diminished as of late. This might just be a sign that the worst is behind us as Nebraska begins to reopen the economy. However, compared to the previous year, the unemployment claims for June 6 were still several times higher, showing that there is still major work that needs to be done.
In addition, now that over 138,091 people have filed unemployment claims since the start of the pandemic, Nebraska’s unemployment rate has risen to 8.3% compared to 2.9% back in February. Nebraska has never seen a jump of that magnitude in its unemployment rate in so short of a time.
An index of COVID-19 restrictions lock-down restrictions compared with Current Population Survey data show that there was a relationship between state tax climate and subsequent job declines. The Tax Foundation identified the states of Wyoming, South Dakota, Utah, Idaho, and Montana all within the top 10 most favorable state tax climates. These states also happened to have less restrictive lockdowns and as a result saw lower job losses when compared to other states.
Nebraska’s efforts to avoid the most restrictive lockdown policies appear to have played a significant role in mitigating the losses. That mitigation is abundantly clear as well in the unemployment rates visible in Nebraska. Already, Nebraska’s unemployment rate of 8.3% is considerably lower than the national average of 14.7%, which ranks Nebraska as having the third-lowest unemployment rate nationally.
Current evidence suggests that small businesses are only operating with less than two months’ worth of cash on hand, with the median monthly expenses of a small business being in excess of $10,000. Nebraska’s small businesses employed almost half of the Nebraska private workforce in 2019.
Although we cannot expect the lifting of the restrictions this month to lead to an immediate return to economic activity levels prior to the pandemic, research suggests that a phased-in reopening is the best path forward to mitigate both the human cost of the disease and the economic damage.