Effects of COVID-19 on region tops 2020 Indicators forum

WILKES-BARRE — As the county, state and country continue to struggle with the effects caused by the COVID-19 pandemic, Wednesday’s Indicators 2020 report of The Institute for Public Policy & Economic Development at Wilkes University centered largely on three topics — jobs, the economy and education.

Teri Ooms, executive director of The Institute, led the virtual discussion of the detailed report with about 140 participants.

“Of all the measures of the economy, one of the most common metrics we see reported in the media is the unemployment rate,” Ooms said. “While it doesn’t tell the whole story of the economy, it’s an easy way to understand the barometer of the state of the labor market.”

Ooms said unemployment has trended significantly downward since about 2012. After the last recession, she said there was a significant recovery, with the labor market reaching unemployment lows for this economic cycle in 2018 and 2019. And with the last recession, Ooms said the region was not hit as hard due to its economic diversification, however it took longer than most areas to recover.

“As we all know, unemployment spiked this year, where we saw rates rise a bit in March as COVID-19 began to broadly affect the United States,” Ooms said. “In April, rates skyrocketed the highest in many years in both counties: 17.1 percent in Lackawanna, 18.4 percent in Luzerne, and 15.5 percent statewide.”

Ooms said May rates will be released in the coming days, and while she expects to see at least a modest improvement, the unemployment rate is likely to remain elevated in the coming months as the economy recovers.

“There is still much uncertainty going forward, including long-lasting impacts on certain sectors like travel and entertainment, as well as the prospects of a second spike later this year,” Ooms said.

As of June 6, there were 500 initial claims and over 14,000 ongoing claims in Lackawanna — down from a high of over 22,000. Luzerne County as of June 6 had about 1,000 initial claims and more than 24,000 ongoing claims, down from over 34,000.

Both counties’ claims by sector include retail, health, and accommodations and food service as the top three, but in different order.

“But it is also important to note, that a more granular analysis of each category would reveal interesting results,” Ooms said. “For example, while food service is down, grocery store sales are up.”

Tourism spending down

The impact of a decline in spending from tourism would have wide-reaching impacts on the region’s economy, Ooms said.

“As we reported in this year’s indicators report, as of 2018, visitor spending in the region by business and pleasure travelers was over $1.6 billion, and had been growing year over year,” she said.

Ooms explained that many economists are naming this a “V” shaped recession — short and sharp. She said this is primarily due to the fact that this economic situation is driven by a public health crisis, not a deeper economic issue.

Ooms said that when unemployment goes up and a large number of people experience income loss, more will fall into poverty, especially those with lower paying jobs who were close to the poverty line already.

“Data collected over the next year or two will tell us how much COVID-19 and the related loss of income and employment has caused a broader increase in poverty in our region,” Ooms said.

Education metrics

In this year’s indicators report and past reports, Ooms said she has seen wide differences in metrics of school performance and outcomes across school districts. While the region has performed near or slightly better than statewide averages in measures like the graduation rate, districts that are more socio-economically and fiscally challenged tend to lag behind the relatively affluent suburban districts.

“This year, education was interrupted in an unprecedented way by COVID-19,” Ooms said.

Ooms said educators did the best they could to maintain some continuity in utilizing remote learning technology, but she is also aware that technology resources are not equally distributed among school districts.

• 83 percent of households in the region have internet access at home in one form or another; however, this share drops to 60 percent among the lowest income households.

“This technology gap looks to be a significant barrier to education, especially when places with public computer or internet access, such as public libraries, were also closed by the pandemic,” Ooms said. “Having internet access, does not mean that children have access to equipment that allows them to carry out online instruction — another challenge.”

COVID-19 impacts far-reaching

Ooms stressed that the economic impacts of COVID-19 are significant and far-reaching.

“Unemployment has spiked, and while some recent unemployment data has brought good news, unemployment remains high,” Ooms said. “And we expect at least some slack in the labor market to persist in the coming months.”

She said a coordinated effort for workforce development to equip workers with in-demand skill-sets is even more acutely necessary. The Institute is conducting research on which skills are most in-demand post-COVID-19 and how stakeholders can quickly up-skill displaced workers to meet those needs.

One of The Institute’s COVID surveys asks businesses if they anticipate resuming normal operations with less people. Nearly 58 percent of the respondents indicated no, while 42 percent indicated yes.

“Businesses are mostly optimistic about the future, but indicated that the word from many of their customers is that they would prefer virtual communication and many businesses are dealing with employees that are experiencing huge obstacles with child care and who are concerned about putting their children back in school and child care prior to a widely available vaccine,” Ooms said.