Recent unemployment data shows that the region’s unemployment rates skyrocketed as businesses were shuttered and limited in response to the COVID-19 pandemic, revealing the impacts of the response at the county level.
According to the Kentucky Center for Statistics, Pike County’s unemployment rate more than doubled within one month, from March 20 to April 20 this year, increasing from 8.4 percent to 17.6 percent.
The rates for Eastern Kentucky more than tripled from where they were in April 2019, only one year earlier. This was the case for Floyd, Johnson, Magoffin, Martin, Perry and Pike, among many other counties in the region.
Southeast Kentucky Chamber of Commerce President Jordan Gibson said that much of the increase to unemployment rates is directly related to the closure orders from the state government, which were ordered in response to concerns about the spread of novel coronavirus (COVID-19). As Kentucky continues to allow businesses to reopen throughout June and into July, Gibson said he does not expect the rates of unemployment to immediately fall back down to where they were before when businesses reopen again.
“I think those are eventually going to come back down,” Gibson said, referring to the unemployment rates. “Unfortunately, I don’t think it’s going to happen as fast as they went up because we kind of have a slow, phased reopening. Even if businesses can reopen right now, they’re not able to reopen at full capacity, and so their ability to generate revenue and sales is restricted.”
For the Big Sandy region, the unemployment rate grew from 9.4 percent to 18.3 percent between March and April this year, compared to the 5.7 percent rate in April 2019.
The hardest-hit county in the Big Sandy region was Magoffin, which saw its rate grow from 17.2 percent in March to more than 27 percent in April this year. Magoffin County’s rate in April was the second highest unemployment rate in the state, following only behind Marion County, which had a 28.6 percent rate.
In the Big Sandy region, Martin County had the second-highest rate in April, at 18.8 percent, followed by Pike County (17.6 percent), Floyd (17.3 percent) and Johnson County (16.4 percent).
Perry County’s unemployment rate was 16.9 percent in April, the fourth-highest rate in the Kentucky River region, following behind Leslie (19.5 percent), Letcher (18.4 percent) and Breathitt (18 percent).
Statewide, the data shows that the unemployment rate more than tripled between March and April this year, from 5.3 percent to 16.1 percent, with the number of people unemployed growing to 331,023 across the commonwealth.
Increased unemployment in the region, Gibson said, could potentially impact many aspects of financing for the counties due to a decrease in revenue that is typically generated from income taxes. That loss of revenue could affect the budgets of municipal city and county governments.
Although there are many businesses that have not been impacted as severely by the closure orders, Gibson said, retail and restaurants have seen a big impact.
“As we can see looking at a lot of our downtown and small businesses, our restaurants and small retail, those businesses have been hit really hard, but you also have other businesses that haven’t seen an impact,” Gibson said. “If you’re in a kind of customer service or essential service, the impact hasn’t been that bad, but it really just depends on how essential their business was.”
As businesses start to reopen, Gibson said, one of the biggest concerns right now is how to address the fear of a potential spread of the virus, due to concerns about the spread of COVID-19 that still loom statewide and nationwide. He said business owners throughout the region want to keep their customers safe, and they want their customers to feel safe when they shop. There are many customers, he said, who also want to do their part to stay safe by hand-washing, using hand sanitizer and wearing a face mask when out in public, which has been highly encouraged by state and local health officials.
“I think the biggest concern is just the ability to have people coming in with confidence that things are clean and sanitary and that both the business and the staff and the customers coming in are doing their part to keeping people safe,” Gibson said.
The economic impacts of the closure orders affected several businesses from choosing to reopen after the pandemic and from choosing to open for the first time in the region. Some small businesses, he said, planned to open during the period of time when the closure orders took place, and they were unable to do so.
“It’s slowed the growth of some new businesses coming in,” Gibson said. “Hopefully, that will still happen, maybe at a delayed rate, but it has affected some businesses opening.”
Shaping our Appalachian Region Executive Director Jared Arnett said that while the current situation is tough, there is some hope that the region was already moving in the right direction prior to the pandemic, especially in the area of moving forward on broadband accessibility and telework.
In the midst of the pandemic, Arnett said, SOAR was able to recruit a company which is now providing 150 jobs through the Teleworks program.
“It’s a tough time right now,” he said. “But really, we feel more confident and aggressive about what we were doing.”
That, he said, is giving the SOAR team hope for the future.
“We were built for this moment,” he said. “There’s a lot of communities that are having to go to the drawing board right now.”
Arnett also said another positive is that the plan that is working was developed by people here and has proven to be ahead of its time.
“It’s pretty incredible because the plan was developed by the region and they hit the nail on the head,” he said.
As local leaders look to the future beyond the closure orders and the pandemic, Gibson said, they have continued to encourage people to support small businesses by shopping locally.
“We’ve got a lot of businesses that are still open, whether it’s at reduced hours or reduced capacity, but lots of businesses are still open,” Gibson said. “(We’ve been) encouraging people to maintain social distancing and healthy precautions, but continue to get out and support our local businesses and support our local organizations, just as we’ve always been doing.”
Gibson said shopping locally will help circulate money back into those local businesses, which in turn will help circulate money back into the local and regional economy. He recommended that people shop locally in order to help the local communities and region as businesses continue to reopen.
“There’s definitely reasons to take precautions, but at the same time, the more that we’re able to keep money circulating here locally and help our local businesses, the faster we’ll be able to get through this,” Gibson said.