Tens of thousands likely jobless after Hurricane Ian, economists say

CNN
 — 

Hurricane Ian’s devastating impact will be felt for weeks and months to come, especially in the state of Florida where much of the storm’s damage was sustained. Economists say tens of thousands of people are likely to file for unemployment benefits in the storm’s wake, but if those workers — many in low-paying service sector industries like tourism — don’t come back, the local economies of some hard-hit areas could struggle to rebound.

Although the damage is still being tallied, early estimates indicate that Ian could be the most costly hurricane to make landfall in Florida. The storm’s economic toll of insured losses could be between $53 billion and $74 billion, according to RMS, a Moody’s Analytics diaster-modeling firm.

In the short term, a spike in jobless claims is almost inevitable, economists say: “Hurricane Harvey in Texas prompted a rise of about 50,000 in August of 2017,” noted Mike Englund, chief economist at Action Economics.

“Certainly, there’s going to be some short-term displacement… but it’s hard to predict exactly what that will look like in the Florida context or in the Southeast more generally,” said Lynn Karoly, a senior economist at the RAND Corporation.

The biggest threat is to tourism. “Particularly in coastal communities, and within tourism… how long those effects persist depends on the sector’s ability to rebuild,” Karoly said.

While big companies can at least fall back on insurance, free cash flow or issuing debt to repair or replace damaged buildings and equipment, workers are likely to have a steeper climb back to financial stability.

“The resilience factor could be lower among the lower-wage workforce, and even their employers may also be rethinking about how they staff the positions that they need to fill,” Karoly said. In a labor market that was historically tight pre-storm, there might be more of an impetus to replace displaced workers with machines, self-serve customer features or other technologies.

Dave Gilbertson, vice president at HR technology firm UKG, which tracks real-time labor market metrics like time-card punches, said that in devastated Florida counties like Lee and Hillsborough, workforce activity has already plunged by nearly half —…