In May, Haines had the highest unemployment rate in the state, according to preliminary numbers released by the Alaska Department of Labor and Workforce Development.
The numbers could change slightly before being finalized, “but there’s no way to say this doesn’t suck,” Haines Economic Development Corporation executive director Margaret Friedenauer said.
If the numbers for Haines are accurate, roughly one-quarter of the community’s labor force was out of a job in May.
The unemployment rate for Haines was 22.5%, down from 27.3% in April, but still well above the 6.7% rate last May. As a whole, Alaska’s unemployment rate decreased in the month of May, falling from 13.5% in April to 12.6%. The nationwide unemployment rate for May was 13%.
In late March, the U.S. Congress passed the CARES Act, a COVID-19 economic stimulus bill, which extended unemployment eligibility to almost anyone who had lost income as a result of COVID-19. This included gig and freelance workers, self-employed workers and people who had not earned enough to contribute to unemployment benefits. It also offered benefits to people who quit as a “direct result of COVID-19,” a departure from traditional unemployment qualifications, which typically exclude those who quit jobs.
The application process has been simplified for those applying for unemployment due to COVID-19.
“Because of COVID-19, they have removed some of the hurdles. Right now, you don’t have to prove that you’re looking for a job, which is typically something that comes with unemployment,” said Maddy Witek, furloughed assistant director for Southeast Alaska State Fair, who began collecting unemployment at the beginning of May. Instead, applicants are asked to indicate whether they lost work because of COVID-19.
The CARES Act also included a $600 boost to weekly unemployment checks, on top of whatever amount an individual qualifies for through the state. This provision is set to expire at the end of July unless Congress appropriates additional funds.
The $600 boost has created a unique situation where many in Haines and across the country are able to earn as much or more from unemployment as they would if they were employed.
“I would imagine that there are few people in Haines who are not in that position, based on jobs I’ve had and what I’ve been paid,” Witek said. She declined to say how her current unemployment benefits compare to her wage working for Southeast Alaska State Fair.
Minimum wage in Alaska is $9.89 per hour. The CARES Act boost to unemployment alone breaks down to $15 per hour, and it only goes up from there based on earnings from the past year. A person who made $14,250 in the first four of the last five quarters qualifies for an additional $150 per week—$18.75 per hour including the federal boost. A person who qualifies for the maximum unemployment in the state would earn the equivalent of $24.25 per hour.
Around the country, media outlets have reported employers in lower paying industries like food service have had trouble rehiring employees currently making more without a job.
Witek said if she were to accept a job offer before the end of July, “it would have to be a really good offer.”
“I don’t feel the pressure to get another job right now. It’s a bit like having a personal sabbatical even,” Witek said. She’s been spending time outside, taking online classes and attending online conferences. “It’s given me the opportunity to pause and refocus some of my personal interests and career interests without worrying about paying my rent,” she said.
However, come August, when the CARES Act boost is set to run out, there will be increased pressure to find some kind of employment.
“What I’ll be able to get in unemployment without that extra CARES Act money, it certainly would put a lot more stress on my finances and monthly bills, so even just being able to do something part-time would be good,” Witek said.
For seasonal employees who earn a substantial portion of their income during the summer months, the boost to unemployment won’t make up for an entire season of lost work.
“I would usually make $1,200 a paycheck guiding,” said Chris Muse, who worked as a river guide for Chilkat Guides last summer and planned to again this summer. But this doesn’t factor in tips, which he estimates could equal 75% of his regular earnings every pay period. For the same two-week time period, Chris makes $1,446 on unemployment.
Haines river guide Zack Hawks estimates he’s making 30% less than he would if he were working right now, factoring in tips.
Although less than what the guides would normally be making, the boost still makes unemployment more lucrative than current employment options.
“Financially right now, it doesn’t make a lot of sense to take part-time work. I don’t want to make it all about money, but it’s hard to turn down what they’re offering,” Muse said.
Muse and Hawks said they aren’t actively looking for employment. Both said it would take a particularly attractive offer in an interesting field to make work make sense.
Hawks said he’d be interested in a job that offered him the ability to learn a new skill, a technical apprenticeship like carpentry, but it wouldn’t be worth it to get a job as a barista or receptionist.
Those who work seasonal jobs often count on the income from summer to get them through parts of the year without work.
A normal pattern for guides is a summer and winter job with a couple of months off on either end, Muse said. The money from the summer helps them through the months without employment. He said the reduction in summer pay this year will make it tougher, but he has experience living cheaply.
“We know how to make it work. We know how to cut corners when we have to,” Muse said. He said he spent the past two summers living out of his trailer. And for now, he has a job lined up beginning in October hanging Christmas tree lights in Salt Lake City.
Hawks said he will likely end up working longer this winter to offset the summer’s losses and will target higher paying jobs when he begins looking for winter employment.
The CARES Act boost will help this year, but Muse said he worries about next year. COVID-19 has decimated the cruise ship industry, and without cruise ships, there may not be a job for him in Haines in 2021.
Those involved in local economic relief efforts recognize there will be a greater need for individual assistance when the federal boost goes away.
“We are encouraged that unemployment programs are helping so many in our community but recognize a greatly increased need when these expanded programs run out,” Haines Chamber of Commerce executive director Tracey Harmon said. She said the chamber is beginning to look at ways to support job creation and workforce assistance, in addition to helping businesses owners impacted by COVID-19.
Come August, those eligible for unemployment in Alaska will be reduced to the state’s weekly payments, which range from $56 to $370, depending on past earnings.