‘An unprecedented increase’: Johnson County April unemployment rate highest in recorded history

In March, the Johnson County unemployment rate was about 2.5 percent. By April 12, the rate had spiked to 10.5 percent — the highest it’s been since official record keeping began in the 1980s. Normally bustling with people, downtown Overland Park (pictured above) was largely empty during COVID-19 stay-at-home orders.

While Johnson County’s April unemployment rate was lower than statewide figures, it was still four times higher than it was in March, Doug Davidson, president of the Johnson County Economic Research Institute, said.

The local spike is part of a widespread trend of economic slumps caused by the COVID-19 pandemic.

“As you might imagine, there is a substantial increase in unemployment,” Davidson said.

In March, the Johnson County unemployment rate was about 2.5 percent. By April 12, the rate had spiked to 10.5 percent — the highest it’s been since official record keeping began in the 1980s.

To put it in perspective, in April 2009 during the Great Recession, the Johnson County unemployment rate was 6.3 percent. At its peak in September 2009, 7.3 percent of Johnson County was unemployed.

“This is an unprecedented increase,” Davidson said. “We’ve never seen an increase in unemployment this rapid, this dramatic.”

Based on data released by the United Community Services of Johnson County, employees of the “accommodation and food services” industries in Johnson County comprise one-third of those who filed for unemployment benefits.

To put it in perspective, in April 2009 during the Great Recession, the Johnson County unemployment rate was 6.3 percent. The local spike is part of a widespread trend of economic slumps caused by the COVID-19 pandemic.

Additionally, the figure for the current economic recession might be underestimating the actual unemployment rate, Davidson said.

Reports from the Bureau of Labor Statistics suggest that some people who should have been counted as unemployed were counted like they were employed, but not actively working — the classification for people taking temporary leave or extended vacation. If the count had been done accurately, Davidson said, it would likely put the unemployment rate past 16 percent nationally.

“I don’t know exactly what that would translate to in Johnson County, but I’m sure there was a little bit of that effect going on here as well. And so, the 10.5 percent is probably a little bit conservative,” Davidson said.

Furloughed individuals were among those miscounted, Davidson said.

“They haven’t lost their job entirely, but they’re currently laid off temporarily with the idea that once the crisis passes, they will be reemployed,” Davidson said. “The Bureau of Labor Statistics apparently miscounted those people.”

Also, people who are considered unemployed have to be actively job-searching so the unemployment rate doesn’t necessarily account for other individuals who found themselves out of work because of the pandemic, Davidson said.

“They haven’t lost their job entirely but they’re currently laid off temporarily with the idea that once the crisis passes, they will be reemployed,” he said.

Local numbers aren’t available yet for the month of May, but national figures suggest there could be a respite.