How many people in Lexington are out of work? It’s now more than the Great Depression
The number of people out of work in Fayette County has now surpassed records set during the Great Depression in the 1930s, city officials said Tuesday.
“Over 25 percent of our Lexington workforce is out of a job or has lost hours or wages,” said Lexington Mayor Linda Gorton during a Tuesday Lexington-Fayette County Council meeting on Gorton’s $372 million budget proposal.
In March 2019, 408 people from Fayette County filed for unemployment. This March, 18,200 people from Lexington filed for unemployment. April’s unemployment filings have continued to climb, making Fayette County’s unemployment rate now over 25 percent of its workforce, according to city estimates based on the latest available data.
“We have exceeded unemployment for the Great Depression of the 1930s,” Gorton said. The unemployment rate in Fayette County during that time was 24.7 percent.
In comparison, during the recession from 2008 to 2012, unemployment in Fayette County hit its peak at just under 9 percent in 2010, according to U.S. Bureau of Labor statistics data.
Lexington’s jobless figures mirror the state’s unemployment numbers.
Figures released last week show the total number of initial unemployment claims filed since the beginning of the novel coronavirus outbreak in mid-March in Kentucky was 500,000, or 24 percent of the state’s total civilian workforce.
Prior to the coronavirus outbreak, Fayette County had much lower unemployment than almost all other Kentucky counties. It has hovered under 3.5 percent for more than 18 months.
Gorton’s comments came hours after she unveiled her budget proposal for the fiscal year that begins July 1. Due to coronavirus-related business shutdowns and job losses, the city is looking at a more than $40 million drop in revenues for the upcoming budget that begins July 1. That’s on top of current-year revenue shortfalls of $9 million.
To balance the city’s books, Gorton proposed $12.6 million in cuts across city government, axing $6 million in allocations and grants to nonprofits and other agencies and tapping $30.2 million in one-time money from various reserve and savings accounts. The proposal also includes freezing 47 open positions and little new borrowing for infrastructure projects.
The council has until June 30 to make changes to Gorton’s proposed budget. The council will continue to meet to discuss the budget over the next several weeks.
More than half of the city’s revenues comes from occupational taxes —or a tax on wages. The spike in unemployment resulted in a dramatic drop in revenues, Gorton said. Just how long people will be out of work is unknown, she said.
Finance Commissioner Bill O’Mara told the council the revenue estimates and budget is predicated on more businesses operating and more employees coming back to work in August. But that’s largely a guess, he said.
“We are estimating a moving target,” O’Mara said. When businesses reopen is largely dependent on a host of factors Gov. Andy Beshear has recently outlined. Some medical offices reopened Monday. Others will come back online throughout the month of May. Lexington’s health care sector is a large driver of its economy.
But Gorton also cautioned that it may take years for Lexington’s economy to recover. Gorton has appointed a COVID-19 Economic Response Committee which she will co-chair with Luther Deaton, CEO and president of Central Bank. That group will be looking at ways to make sure when restrictions are lifted, Lexington businesses are ready to reopen safely.
Gorton said during her budget speech Tuesday that livelihoods can not trump saving lives as the city continues to maintain social distancing guidelines to stop the spread of the coronavirus.
“I know this is hard. Social distancing is hard,” Gorton said. “And we still aren’t sure when we will be able to reopen our economy. The virus sets this timetable. But I have confidence we will get there if we keep working together and helping each other.”
This story was originally published April 29, 2020 at 9:01 AM.
