Massive layoffs hit Arizona as coronavirus pandemic staggers economy

Arizona is ramping up its unemployment insurance operations as it sees an unprecedented flood of new claims as the coronavirus staggers industries that are key to the state’s economy.

The state saw nearly 30,000 new filings last week, a 760% increase from the week before. It is expected to see an exponential increase in filings for the current week as restaurants, bars, resorts and other industries that cater to tourists and the public cut huge numbers of staff.

State Senate President Karen Fann said Friday that she was told by a state official that 40,000 new filings were made in one day alone this week. That didn’t surprise her because the state restaurant association had been pushing lawmakers to approve a change in law before they recessed this week waiving a one-week waiting period for unemployment benefits.

“They said please, can you make sure this gets done before you recess because it looks like our restaurants are going to be laying off 150,000 people on Friday,” Fann said of the previous week’s plea. 

The food service industry alone employs about 230,000 people in the state and an estimated 80% have been furloughed or laid off in the past couple of weeks, said Steve Chucri, who leads the Arizona Restaurant Association.

“What restaurants are doing is going down to their core managers,” Chucri said.

The state’s tourism industry hits its peak in March, when the weather is perfect for visitors enjoying the state’s resorts, baseball Spring training, historic small towns and National Parks. Much of that business has evaporated as the nation went into lockdown and Gov. Doug Ducey ordered restaurants and other attractions closed. Schools have also been closed.

The historic southern Arizona frontier town of Tombstone is essentially closed, with bars, restaurants, museums, playhouses and even the final resting place for victims of the shootout at the OK Corral, Boot Hill, shut down, Mayor Dusty Escapule said. He and his wife run a business that gives tours on historic stagecoaches.

“Having lived here all my life, a fourth-generation native, I’ve seen hard times — but I’ve never seen it like it is right now,” said Escapule, 71. “It’s literally a ghost town.”

Escapule has laid off seven stagecoach drivers and other staff, part of what he estimates as the firing of 175 of the town’s 1,250 residents who cater to the half-million tourists who visit every year. 

“Everybody’s wondering how long is this going to last, when are we going to be able to get back to work, when are we going to start being able to make money and pay bills and put our employees back to work,” he said.

The number of coronavirus cases in Arizona rose to at least 667 with 13 dead, the Department of Health Services reported Friday. Gila County announced its first case, a Payson woman who had recently traveled. That leaves Greenlee as the only virus-free county and the only one not subject to business restrictions imposed by Ducey. Late Friday, the Navajo Nation reported 21 new virus cases and confirmed two deaths. 

The governor also announced a new $5 million account to help renters stay in their homes Friday.

For most people, the coronavirus causes mild or moderate symptoms, such as fever and cough that clear up in two to three weeks. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia and death. 

The Arizona Department of Economic Security reported 29,268 new filings for unemployment insurance last week, up from about 3,900 the previous week. A department spokesman, Brett Bezio, said the agency is increasing staffing by about 80 workers or 400%.

The agency is also beefing up the capacity of its online filing system to handle all the new traffic. Bezio didn’t respond to repeated requests for information on how big a processing backlog the agency is facing.

Some restaurants are hanging on, switching to all-takeout and delivery service. State Rep. Jeff Weninger, who runs two Tempe sandwich shops and a large pizza restaurant in Chandler with more than 50 employees, is one of those.

“I know a lot of restaurants that are really struggling — people who haven’t done takeout before,” Weninger said. 

For those out of work, the state provides just $240 a week in unemployment benefits, the second-lowest in the nation. State lawmakers haven’t increased the amount for more than 15 years.

But under a massive $2.2 trillion federal relief package approved by Congress Friday, the state rate will be boosted by $600 a week for four months. The legislation also contains a rescue package for small businesses that will offer forgivable loans for them to pay expenses.

That will be helpful to small businesses, Weninger said, but “if we’re in the same boat or worse boat three months from now, then it’s game over for a lot of places.”

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