Weeks before the end of federal unemployment benefit programs on Sept. 4, Oregon Employment Department officials have shifted their efforts toward helping recipients get jobs — and not necessarily the jobs they had prior to the economic downturn resulting from the coronavirus pandemic last year.
"We want to make sure that people looking for work get the services they need, so they can be back at work before those important safety-net programs end," acting director David Gerstenfeld said.
He said that goes beyond reinstating federal work search requirements — that people are able to work, available for work, and actively seeking work to continue to qualify for unemployment benefits — and registering people for the iMatchSkills system to connect them with jobs.
Since mid-July, he said, several WorkSource offices have reopened for in-person appointments to help people with job searches and training. The pilot project involves only offices in Eugene, on the Oregon Coast and in Southern and Eastern Oregon; Portland-area offices will be open soon. Multnomah and Washington counties are served by the nonprofit Worksystems Inc.; Clackamas County has a separate partnership.
All WorkSource offices, which are partnerships between the state agency and others, have been accepting telephone and online appointments for job seekers. They do not process benefit claims.
"Some people are really self-sufficient and know exactly what is needed. It's pretty easy for them to find a job through iMatch Skills, and there's not a huge effort on our part to help them find that next job, especially in such a competitive job market," Gerstenfeld told reporters during a Wednesday, July 21, conference call. "Other people are facing real barriers, such as medical conditions or child care, or it could be they need some additional training to be competitive for a job or the career they want. So there is a lot of individualized work.
"We know there is a lot of pent-up demand from people wanting assistance. So we want to make sure we are as well prepared as possible."
Agency economist Gail Krumenauer said a couple of studies of the 25 states that chose to end extra federal benefits ahead of schedule — Oregon is not among them — do not indicate that they have caused massive dislocations for unemployed workers. One study was by the University of Massachusetts at Amherst, the other by the national job listing website Indeed.
Krumenauer said about 32,500 people still are unable to come back to work for various reasons related to the coronavirus pandemic. They may be ailing themselves, have responsibility to care for family members, or unable to obtain child care.
But that total is down from 66,000 last fall, and Krumenauer said the number of unemployment benefit recipients has dropped in recent months. The two-month plunge from February to April 2020, when Oregon lost almost 290,000 jobs (about one in seven) after the pandemic resulted in business curtailments and closures, has now been deemed a recession. The usual federal definition of a recession is a decline in gross domestic product — the measure of goods and services — for two consecutive quarters.
Oregon's unemployment rate shot up from a record low 3.5% in March 2020 to a record adjusted high of 13.2% in April 2020, and the number of unemployment claims also topped 500,000 within a short period. The rate has since declined; it was 5.6% in June, although Oregon has regained only about two-thirds of the lost jobs. A full recovery is projected in late 2022 or early 2023.
"Given the scale of the impacts to the economy, this was definitely worth an exception to that rule," Krumenauer said.
Oregon job growth in the first six months of this year equaled the number of jobs created in the 22 months prior to the pandemic in early 2020. But Oregon businesses reported almost 98,000 job vacancies this past spring, a record since that statistic was first compiled in 2013.
Changing job market
Krumenauer said there are several reasons. "There is a lot of pent-up demand for goods and services." The Oregon Office of Economic Analysis mentioned in a July report that $2.1 trillion in savings has been amassed nationally during the pandemic.
She also said there are big changes in the workforce itself, such as a record number of people who voluntarily left their jobs.
Some left for higher-paying careers. While Oregon's average starting wage in the leisure and hospitality sector (restaurants, bars, hotels) remained around $13 per hour during the first quarter of 2021, it rose by $2 in retail trade to $17 per hour — and it was $20 per hour in transportation, utilities and warehousing. Krumenauer said there also was competition among businesses within a sector.
"There is more worker movement that increases the hiring needs of businesses," she said. "They often create a vacancy to replace them."
The other big change, a continuation of a pre-pandemic trend, is retirements. One of every four Oregon workers is 55 or older, and the ratio is greater in several job sectors. Between 2016 and 2019, the number of people who chose to retire rose by 21%.
Although the pandemic interrupted that trend, Krumenauer said, "we expect they will be on the upswing again" as more post-World War II baby boomers get out of the workforce permanently.
"All of that adds up to a challenging hiring environment for employers," she said.
Gerstenfeld said uncertainty lingers because of an uptick in infections caused by the Delta variant of the COVID-19 coronavirus: "The pandemic remains a hard-to-nail-down variable."
An end in sight
The Oregon Employment Department has paid $10.2 billion in state and federal unemployment benefits since March 2020. Much of that money was from several federal programs approved or extended by Congress, but are scheduled to end Sept. 4. (Technically, the deadline is Labor Day, but Oregon and most states end their claims week on Saturdays.)
• Benefits for self-employed and gig workers, many of whom were not covered by the system until the 2020 CARES Act, which created Pandemic Unemployment Assistance.
• Benefits that kicked in (53 weeks total), known as Pandemic Emergency Unemployment Compensation, once someone exhausted regular state benefits of 26 weeks.
• Benefits (an extra $100 per week) for people who receive regular state benefits, but also earn at least $5,000 from other income sources, under Mixed Earner Unemployment Compensation.
• Across-the-board benefits of $300 per week known as Federal Pandemic Unemployment Compensation. This had started at $600 per week under the CARES Act, but lasted only four months; it was restarted in January at the lower level and renewed in March.
Acting director David Gerstenfeld said it is possible a few people may qualify for extended benefits or help from the regular state program, which is funded by payroll taxes on employers.
"We are not anticipating that a work search requirement by itself is going to significantly shift the number of people receiving benefits," he said. "We anticipate an ongoing decrease in the number of people receiving or seeking benefits. But I believe that is related to a really strong job market, not work search requirements."
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