WASHINGTON: Ohio could end the year with a notable record: fewest new unemployment-claim filings. So far this year, 364,762 claims for benefits have been filed, according to the Ohio Department of Job and Family Services. That’s tracking 4.1 percent below 2015 and puts the state on course for the fewest claims since 1971, when tracking began.
Claims have been moving lower since the end of the recession. The same thing is happening nationally. There were 251,000 claims filed this week, the 90th straight week when claims totaled fewer than 300,000. That’s the longest streak since 1970, when the labor force was much smaller than today. Much of the drop in claims can be attributed to an improving economy, and that demand for workers remains strong, economists say.
“That’s No. 1. The economy has done better,” said Mark Vitner, managing director and senior economist at Wells Fargo & Co. “The current extremely low level of claims demonstrates that the labor market remains solid at the end of 2016,” PNC Bank said in a research note this week. But there are other factors at work, they say. Among them: an aging workforce, more freelancing and worker-retention efforts by companies. “It is causing some firms to hang onto labor. They are less willing to let people go because they know how hard it is to replace them,” Vitner said.
Also, there are fewer people in the workforce today than before the recession. “You can’t file an unemployment claim unless you lost a job,” Vitner said. Cleveland area economist George Zeller, who has tracked unemployment claims in Ohio, notes another possible factor.
“We’re not getting a very large level of claims in part due to the Ohio unemployment system,” he said. “There are a stringent set of requirements for filing a claim.” He said workers who have been laid off previously may struggle to collect benefits if they worked only part time or haven’t accumulated enough hours to be eligible for benefits again. The legislature, meanwhile, is debating proposals that could make it even tougher to collect benefits, he noted.
Zeller’s view is that economic growth in the state is weak and that state government is not doing enough to create more jobs. He said cuts in the the amount of money the state gives to local governments has led to the loss of government jobs. Tracking the number of claims can be important because they can provide clues about how the labor market is doing, Vitner said. “It’s a very timely data point. … It is simple to understand,” he said. “Significantly, it does provide an early warning when conditions are shifting.”
