Unemployment claims continue to pile up in New Mexico, as new state numbers show that 28,344 residents filed initial unemployment claims this week.
The new unemployment claims filed between March 27 and April 2 represent an 11% decline from last week’s record-shattering total, but remain well ahead of the total from any other week in living memory.
Moreover, the total doesn’t include thousands of New Mexico residents who were unable to place a claim by phone due to extreme call volume overloading the Department of Workforce Solutions’ system.
Department Secretary Bill McCamley told the Journal his agency is adding employees to staff the phone lines but acknowledged the phone system has left many residents unable to file claims.
“We know it’s been frustrating,” McCamley said. “No one is sugar-coating the situation, but we’re working hard to improve our staffing.”
The new numbers also showed 44,000 New Mexicans are either already receiving unemployment benefits or are awaiting certification. The state’s unemployment trust fund balance dropped slightly, from $453 million last week to $450 million Friday, although McCamley said he isn’t worried about the fund.
“Our trust fund, relative to other states, is in a pretty healthy shape,” he said.
Nearly 10 million Americans applied for unemployment benefits in the final two weeks of March, according to The Associated Press.
The recent spike in unemployment claims in New Mexico and across the country stems from efforts to control the spread of the new coronavirus, which had left 10 New Mexicans dead as of Friday afternoon.
More than a week after Gov. Michelle Lujan Grisham ordered all nonessential businesses to close to prevent further spread, McCamley said he expects the number of new claims to continue to fall slightly in the coming weeks.
However, New Mexico faces an arduous road to economic recovery. Reilly White, associate professor of finance at University of New Mexico’s Anderson School of Management, said he expects unemployment claims to continue in waves as the crisis worsens and affects different industries.
“It’s going to be a very rough road ahead,” White said.
White added that there are two paths the economy could take: a quick, sharp “V-shaped” recovery, in which demand returns quickly, or a longer, more gradual recovery in which more workers stay unemployed and demand doesn’t return as quickly. He said it’s increasingly likely that New Mexico will have a more gradual recovery.
“Typically, employers fire workers more easily than they rehire them,” White said.
He said the first wave of layoffs largely came from such businesses as restaurants and stores, which rely heavily on walk-up traffic and were devastated by the closure order.
If businesses continue to stay closed and the unemployment rate doesn’t drop, White said, people will lose confidence in the state of the economy. This, he said, could prompt layoffs in sectors ranging from finance to real estate.
Ultimately, White said, a prolonged recession would prompt budget shortfalls for states, counties and cities, which would then generate a third round of layoffs.
“We’re seeing the tip of the iceberg,” he said.
Facing an unprecedented volume of calls, the state Department of Workforce Solutions rolled out changes to its call center this week, including asking people to call only on certain days depending on the last four digits of their Social Security numbers.
Still, McCamley said, the department received around 500,000 calls Monday morning, which overloaded the system. Consequently, many New Mexicans received an automated response saying all agents were unavailable.
A call from the Journal to the unemployment hotline Friday morning went unanswered, and directed to the same automated message.
McCamley said the call center houses 80 to 100 employees on a typical workday, and fields around 2,600 calls per day. But he said the department doesn’t have the staff to field every call, even with the call volume dropping sharply as the week progressed.
“We’re asking people to be patient; we’re asking people to be kind,” McCamley said.
McCamley said the agency is working to add new workers and retrain existing employees to take calls. In the meantime, McCamley continued to encourage New Mexicans who are able to file claims through the agency’s website, which he said 95% of applicants have done so far.