By The Numbers: Coronavirus Slams Wisconsin Economy
By: Cori Petersen
290,000 Apply for Unemployment
As of April 5, 290,000 Wisconsinites have applied for unemployment benefits since Gov. Evers declared Wisconsin to be in a public health emergency March 12. About 69,300 applied the week of March 14 about another 115,700 applied the week of March 23, and then another 103,000 the week of March 29, according to the Department of Workforce Development’s (DWD) unofficial numbers. Monday, March 30 saw the most applications with an unofficial total of 24,664 just that day. Tyler Tichenor, spokesman for the DWD, said that the week of March 23 “we had about a 75% increase in the number of applications than we did at the height of the Great Recession.”
Noah Williams, director of the Center for Research on the Wisconsin Economy (CROWE) at the University of Wisconsin Madison, tweeted on April 1 that they are estimating the unemployment rate to be around 11.3%, “well over the peaking in 2009 and closing in on record high from 1982.” Yikes.
22 Facility Closures and 47 Mass Layoffs Reported for March
There were 22 facility closures reported to the state and 47 workforce reductions, which add up to 69 data points for the month of March. State law requires companies of 50 or more employees to provide notice to employees and the state 60 days prior to a mass layoff. Last March only saw 11 data points for these categories. Of the 47 reported company layoffs, over half occurred in Madison and Milwaukee — with 17 in Madison and 11 in Milwaukee. As of April 6, April has already seen six mass layoffs throughout the state and seven facility closures.
No doubt these numbers seem bleak, however, an important detail to keep in mind is that some companies have closed temporarily and some workers have been laid off temporarily due to social distancing requirements and only businesses deemed “essential” allowed to stay open. What this means, is that while no one knows exactly what is going to happen with COVID-19 and what timeframe we are looking at, some companies have plans to reopen with their same employees.
Publicly Traded Companies Lose Over $100 Billion in Revenue
While it is still very unclear how long this will last, there is no doubt that COVID-19 has changed the economic landscape across the country and Wisconsin is feeling it in large firms and small businesses alike. CROWE examined how the value of Wisconsin firms have reacted to COVID-19 by plotting the market capitalization of 56 of the state’s 60 publicly-traded companies, Rockwell Automation, Kohl’s and Harley Davidson being some of the most recognizable. In other words, they created a Wisconsin index.
On February 21 market capitalization was about $290 billion for the Wisconsin index, and as of March 20, these firms had lost over $100 billion of revenue.
By plotting the S&P 500 alongside Wisconsin’s publicly traded companies, CROWE concluded that the Wisconsin economy is behaving much like the national economy, that is until recently. The lines track alongside each other up until about March 18 when Wisconsin’s companies took a dip further than the national average.
Large, publicly traded companies have a budget that can withstand this type of volatility to some extent. Small businesses on the other hand with far slimmer margins, are paddling frantically to stay afloat. Most restaurants have had to shudder their doors to sit-down meals in order to accommodate social distancing, but are doing curbside pickup for their menu and some even offer delivery.
Other store-front businesses have had to be innovative often using the internet and social media to sell their goods. For instance, Dandy a self-described “midventurous modern” store in Milwaukee has two parts to their business: their vintage store and their event space. Both parts require their own business strategy in this climate. For the vintage store, the couple who owns the store, Ryan and Jess Day, have quickly built a website and brought their sales online. They drive a lot of traffic to their website through their Instagram account where they post pieces as they add them to their website. As for the event space, they have had to postpone many gatherings.
“We’re definitely losing revenue with all the postponements — weddings in particular,” said Ryan Day. “Sure, everything might be up and running again come May, but couples can’t make their guests wait till the last minute, hence all the ‘just in case’ postponements. It’d be nice to have more clarity.”
To get them through this time they are exploring the various options made available by the government. “Still unsure of the best program, if they even apply to a husband and wife operation,” said Ryan Day. “Forgivable grants? Low-interest loans?” They are seemingly leaving no stones unturned.
Three Companies Look to Hire a Total of 8,700 New Employees
But in the midst of this chaos, parts of the market are thriving, namely grocery stores and chains like Wal-Mart. With people staying at home and not knowing how long we will be confined to our dwellings, many have stocked up on household goods which caused the now notorious rush on toilet paper. But items are flying off the shelves so quickly that many stores are hiring to increase their workforce for the duration of COVID-19. Wal-Mart, CVS and Amazon are hiring 800,000 new workers nationwide.
On a local level in Wisconsin many grocery stores are hiring, including Pick ‘N Save and Metro Market — which are looking to hire a combined 2,500 temporary workers in their production facilities, distribution and transportation. Milwaukee-area grocery chain — Sendiks — is hiring as well specifically for the temporary positions they’ve increased such as personal shoppers, positions that help with online orders, grocery associates stocking shelves, and cleaning jobs. Wal-Mart specifically has said they are hiring 4,200 workers in Wisconsin.
LaCrosse-based Kwik Trip is looking to hire 2,000 workers amid COVID-19. In August 2019, Kwik Trip began a delivery service for hot food and grocery items through the app EatStreet. And surprisingly, amid the surge in demand for delivery, Kwik Trip didn’t raise their prices. Instead, they announced on their Twitter account March 17 that they were making all deliveries free through the end of April.