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Tri-State Jobless Claims Surge as Coronavirus Spreads

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03/26/2020 | 05:17pm EDT

By Kate King

Thursdays in late March are usually a flurry of activity at the Poughkeepsie Grand Hotel in New York as staff prepare for the weekend's weddings.

That was before the coronavirus pandemic forced cancellations and the hotel had to lay off more than 100 employees. This week, the front doors were locked, the lobby music turned off and the hallway lights dimmed to save electricity.

"We're literally in limbo and I think that's the worst thing that can happen," the hotel's general manager Maureen Kangas said.

As expected, the number of people applying for unemployment benefits in New York, New Jersey and Connecticut skyrocketed in the week ended March 21 after governors in all three states ordered nonessential businesses to close to contain the spread of the virus.

Coronavirus infections continued to climb this week, with more than 37,000 confirmed cases in New York, 6,800 in New Jersey and 1,000 in Connecticut as of Thursday afternoon.

Nationwide, a record 3.28 million people filed unemployment claims last week, according to data released Thursday by the U.S. Department of Labor.

In New York, about 80,000 claims were filed in the week ended March 21, a 463% increase from the previous week. The number of claims seemed low considering that the New York State Department of Labor reported receiving about 1.7 million calls and 2.3 million visits to its website that week. A spokeswoman for the department didn't make anyone available to comment Thursday.

David Cooper, a senior economic analyst at the think tank Economic Policy Institute, said unemployment claims in New York may be lower because many of the state's jobs, particularly in the financial and information sectors, can be performed from home. Still, he said the pandemic's impact on the workforce is so unprecedented that it will take awhile for economists to figure it out.

"It's going to take time to understand all these patterns that we're seeing in these data," he said.

New Jersey saw a 1,546% increase in claims week-over-week, with the 156,000 claims far surpassing the state's previous record of 46,000 claims filed in a single week in November 2012, after superstorm Sandy.

"It's shocking when you see the numbers," said Robert Asaro-Angelo, the state's labor commissioner. "But the way I like to look at it is, the system is working. People pay into unemployment for this very reason."

Laid-off restaurant and bar employees filed the most claims, followed by workers from doctor and dentist offices and personal and laundry services, such as hair and nail salons and dry cleaners, according to the state's labor department. Almost two-thirds of laid off workers were women, 50% had a high-school education or less and many were under 35 years of age, the department said.

In Connecticut, unemployment claims increased 630% last week compared with the prior week, with about 25,000 people applying for benefits.

The region's hotel industry has been hit hard by the pandemic. International travel and tourism has dried up, and the governors of all three states have issued executive orders banning large gatherings, forcing hotels to cancel weddings, conferences and other events.

In New York City, hotel occupancy -- the percentage of available rooms sold -- was 17% last week, compared with 87% during the same week last year, according to hotel data tracker STR.

Vijay Dandapani, president of the Hotel Association of New York City, said 60 hotels have shut down entirely.

"We don't know if it's temporary or permanent," he said. "I think, frankly, many of them don't know. It depends how long this lasts."

In a bid to stay afloat, some hotels are offering discounted rates to emergency responders. Others are talking with city and state officials about possibly using hotel rooms for sick patients as hospitals become overcrowded, Mr. Dandapani said.

At the Poughkeepsie Grand Hotel, located north of New York City in Dutchess County, Ms. Kangas said the coronavirus struck just as the busy season was ramping up. The hotel typically hosts about five weddings a weekend, and it had been booked through the summer.

Ms. Kangas said she and a few other top-level employees are still showing up to work at the empty hotel. The reservations and sales department are taking reservations for the summer and fall -- and booking weddings in 2021 -- but at this point everything feels uncertain.

Down the hill at the hotel's sister property, parent company Bonura Hospitality Group was handing out free curbside meals to laid-off employees and their families Thursday. The company, which laid off more than 450 workers across six New York locations, has given out meals to dozens of families a day since Monday, co-owner Michael Bonura said.

Ms. Kangas said she hopes the pandemic is under control soon and the hotel can reopen, not just for the brides and grooms who've had to reschedule their weddings, but for her employees who are out of work.

"These are people that are surviving from paycheck to paycheck," she said. "Everything is a question mark -- everything."

Write to Kate King at Kate.King@wsj.com


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