MOUNT VERNON – While Knox County’s coronavirus caseload has remained relatively low through the first four months of the pandemic, so has its unemployment rate.
Knox County had the seventh-lowest unemployment rate in the state in May, according to data published Thursday by the Ohio Department of Job and Family Services. At 9.3 percent, it trailed only Wayne (9.2), Mercer (9.0), Athens (9.0), Union (8.8), Delaware (8.4) and Holmes (5.1) counties.
It registered several points lower than the state (13.4) and national (13.3) averages.
The county had the fifth-lowest unemployment rate in April, even though it skyrocketed to 12.4 percent due to coronavirus-related business shutdowns (it was 5.1 percent in March). Carol Grubaugh, executive director of the Knox County Chamber of Commerce, said this marked the county’s highest monthly unemployment rate since 2008. Still, it remained well ahead of the state (17.4) and national (14.4) averages.
Local officials believe Knox County’s economic diversity has led to this stability early on. According to the Area Development Foundation, Knox County’s five largest employers encompass four different economic sectors, including manufacturing, healthcare, education and government. Even the two manufacturing leaders, Ariel Corporation and Jeld-Wen, serve different industries (energy and construction).
“While manufacturing took a hit [in March and April], those other three [industries] didn’t, and that’s why we’ve been able to stave off some of the larger drops in employment,” ADF President Jeff Gottke said. “So basically... our economy is diverse enough to withstand a hit in manufacturing.”
That was not the case for some of Ohio’s hardest-hit counties. Logan County, for example, had the state’s highest unemployment rate in April at 30.1 percent. Its biggest employer (by a wide margin) is Honda, which had to suspend operations and furlough workers from March 23-May 1.
Erie County, which had the state’s highest unemployment rate in May (19.9 percent) and third-highest in April (25.5 percent), has suffered similarly. The area’s economy is largely centered around automotive manufacturing and tourism, and both of those industries were disrupted by the pandemic, Erie County Economic Development Corporation Executive Director Abbey Bemis told the Sandusky Register.
Knox County’s economy was also trending in a positive direction before the pandemic hit, Grubaugh noted. Knox County’s annual unemployment rate dropped below 4 percent in 2019 for the first time since the Great Recession. It was one of just 33 counties to clear the mark last year.
“I think part of the reason we continue to have low unemployment rates compared to other counties is due to the great industry, retail, services, etc. here in Knox County,” Grubaugh said in a statement.
“It’s an attractive place to live and work and that certainly keeps our numbers low. Quality of life does impact the economic climate of any county. Our QOL is excellent so I believe good things trickle down this positive stream.”
MOVING FORWARD: After declining from 12.4 to 9.3 percent in May, Gottke expects Knox County’s unemployment rate to have dropped again in June.
He tracks weekly unemployment figures – the number of new and existing claims filed by local residents – and he said the county’s unemployment rate had dipped to 5.1 percent by June 26 (monthly averages will be finalized later this month).
The number of new claims has declined consistently in recent weeks, he added, which is a welcome sign following the turbulent spring. Just 99 new claims were filed by Knox County residents last week, compared to a high of 1,092 during the final week of March.
“We’re getting back to normal,” Gottke said. “Well, maybe not normal, but we’re getting back to where it was before.”
A decline in unemployment rates could mean one of two things, Gottke noted. Either unemployment benefits have ended for a certain number of county residents, and they’re no longer being counted, or they’re going back to work. Gottke feels confident in the latter.
“It’s more likely that they went back to work,” he said.
Ohio has slowly begun to reopen its economy in the last two months, following several weeks of government-mandated shutdowns. The state ordered the closure of all non-essential businesses in mid-March to prevent the spread of the novel coronavirus, which has killed 2,704 Ohioans to-date. The reopening process began May 1 and continues today, with certain businesses and operations still closed by government order.
Knox County’s workforce is made up of 31,600 people, according to the ODJFS. This means that roughly 2,938 residents were receiving unemployment benefits in May – down from 3,918 in April.
Still, Knox County’s May unemployment rate of 9.3 percent was three times higher than it was in May 2019 (3.1 percent). Gottke said some local industries, such as dining and lodging, remain particularly hard-hit by the pandemic. Other industries have experienced job losses as well, as companies have had to cut costs during the state’s economic freeze.
“What I do see happening is maybe with some individual businesses, where they maybe didn’t bring everybody back…” he said. “I’m thinking of an example where I was talking to somebody who worked at an attorney’s office, and they temporarily laid most people off and then only brought back about half of them full-time. That’s an example of where you anticipate something would be a temporary layoff, but it turned into permanent.”
Gottke added that unemployment rates only include new or existing claims – not people who have stopped receiving benefits or who were ineligible for benefits in the first place, such as sole proprietors.
Moving forward, Gottke said the biggest threat to Knox County’s economy remains the pandemic. He seemed concerned by the fact that, like many other states, Ohio has seen a sharp increase in cases over the last two weeks. This could lead to further economic restrictions, which would drive unemployment rates up once again.
“What happens throughout the state is the biggest threat to us,” Gottke said. “You know, our cases are pretty low. I think life, for the most part, has returned – it’s as ‘back to normal’ as it can be – but if cases continue to surge across Ohio like we’ve seen, and the governor and the health director take any measures that may affect the economy, then that’ll affect us here.”
Knox County’s economy is intrinsically tied to the national and global economies as well, Gottke said. Some of the county’s major manufacturers, for example, have ties to specific companies or industries. If those are impacted by pandemic-related shutdowns elsewhere, the ripple effect will be felt here.
“What happens with them is gonna affect us as well,” he said.