HARLINGEN — Families already have felt the impact of coronavirus-induced business shutdowns personally, with some of them trying to cope with multiple members temporarily out of work.
But the statistical impact is now becoming apparent, with U.S. Labor Department figures showing a ballooning jobless rate in the Brownsville-Harlingen Metropolitan Statistical Area.
The Brownsville-Harlingen MSA jobless rate was 5.8 percent in February and 7.4 percent in March, which is actually when the shelter-at-home orders which shut down thousands of businesses became active.
Now, a personal financial-technology company called MoneyGeek has crunched those Labor Department numbers and is projecting that at its peak the unemployment rate in the area will reach 30 percent.
In Texas as a whole, the estimated jobless rate now is 9 percent, said Hilary Adler, director of content marketing for San Francisco-based MoneyGeek.
“MoneyGeek expects the employment situation to worsen in Texas and Brownsville-Harlingen,” Adler said. “Looking at Brownsville-Harlingen, there are about 170,000 people in the workforce which accounts for around 1 percent of the workforce in Texas.
“One percent on the surface sounds low but Texas is a massive state,” she added. “Our forecast of Brownsville-Harlingen is that at its peak, unemployment will be 30 percent or around 50,000 workers.”
These projections would far surpass the previously record high jobless numbers in the Brownsville-Harlingen MSA, which occurred during the Great Recession from 2009-2012, when job losses topped out at 20,000 workers, Adler said.
“It’s worse than the Great Recession in the context that the Great Recession was a couple of years of job losses,” Adler said, “and it’s just unprecedented, immediate job losses at extremely high numbers. It just went from zero-to-60.”
Adler said the breakdown of industry sectors where jobs are being lost shows health care being hit hardest in the area.
“The sector breakdown on that is that the majority of lost jobs in Brownsville-Harlingen are going to come from service-providing industry,” she said. “Now this may be surprising but the top sector within that umbrella is health care with around 13,700 lost jobs.
“I know the health care industry is really at the forefront at the moment but there are a number of reasons we’re forecasting job losses in health care,” she added. “First and foremost, health care is bigger than just hospitals. There are local doctors’ offices, including dentists, nutritionists and ophthalmologists. … Also elective procedures are generally halted nationwide which is a huge portion of revenue for hospitals and outpatient clinics.”
For people who have lost their jobs, Adler encourages them to keep pushing your way into the line for Texas Workforce Commission benefits, even if you’re having a hard time getting through to file a claim.
Also, she said, it’s exactly the right time to assess your spending, and eliminate some of the small luxuries, at least temporarily.
“Are there items that you purchased or that you can cancel and get a refund before things get super challenging?” she said. “Always look for ways to cut your spending.
“I downloaded an app recently that just basically took an inventory of all my monthly recurring expenses and I had no idea that I had two different Hulu accounts, so I was paying around $35 a month for Hulu and I really wanted to pay $11,” she said.
Adler suggests eliminating monthly costs of things like Hulu, Netflix or Amazon Prime, which may be small expenses but together they can add up to $200 or $300 a month.
“You can contact your creditors and let them know about your situation,” Adler said. “Federally-backed mortgages, which are about 75 percent of all mortgages, those are eligible for forbearances and they’re also putting a moratorium on evictions.
“You might also be able to get help from your credit card companies to lower your interest rate or delay payments,” she said. “Student loan companies are working with you to either put your accounts in forbearance or lower your interest rates and that’s on private student loans. Federally-backed student loans have been halted until September so that should be a big relief for a big portion of the population.”
The unemployment projections come as the U.S. economy shrank in the first quarter at the most rapid pace in six years, ending the longest expansion on record, U.S. Commerce Department numbers released Wednesday showed.
The Gross Domestic Product, the broadest measure of good and services produced, fell at a seasonally adjusted rate of 4.8 percent from January through March. It was the first drop recorded since the first quarter of 2015, and the worst drop since the first quarter of 2009.