Slow Start to Summer May Portend Disasterous Winter for Seasonally Unemployed

Two weeks ago, a Washington Post headline stated that the national unemployment rate soared to 14.7%, “The worst since the Depression era.” Bad news to be sure.
Yet, in Cape May County, 15% of unemployment can be a normal part of the annual employment cycle. In January 2016, county unemployment was 15.5%. One year later it stood at 14.9%, with the next year, 2018, back at 15.5%.
Businesses have gotten a bit better of late. In January 2019 the unemployment rate stood at 13.7%. This past January, pre-COVID-19, the rate was 13.6%.
Ten-point swings in unemployment are common in the seasonal, tourist-driven economy of Cape May County. The move from 3.8% unemployment in August 2019 to 13.6% in January 2020 is not an aberrant occurrence. The 10-point shift is a structural part of the local economy, where it is not unusual for thousands of local individuals to file for unemployment as soon as the summer season ends, as they wait for reemployment the following summer.
In 2019, the difference in the number of individuals employed in the first quarter of the year, the dead of the county’s winter, and quarter three, the height of the summer season, was 60%, or nearly 20,000 people.
The ebb and flow of employment in the county is as predictable as the tides. That makes any threat to the cycle dangerous for all concerned.
At various points in the past, the danger has surfaced in Trenton. In 2009, when the New Jersey Unemployment Insurance Fund was near insolvency, there was a move to end the eligibility of seasonal workers. The cost of supporting seasonal workers for the months they don’t work seemed an unfair tax on the general public. Seasonal worker eligibility survived the crisis.
Now, the threat comes from a microscopic virus that cannot survive outside of a host on which it can prey.
Scientists are not sure this accumulation of genetic material deemed a virus is a living thing. Yet, its power to wreak havoc is unquestioned.
The loss of life in New Jersey is appalling, especially in terms of those remaining members of the silent generation. The damage to the economy is also horrific, with national unemployment at a once in-a-century level and with uncertainty the defining characteristic of any recovery plan.
What the virus has done to the pulse of the county economy is introduce an arrhythmia. The irregular heartbeat is especially threatening to the large number of seasonal workers, many of whom exhausted normal unemployment benefits in the annual transition of seasons long before COVID-19’s appearance.
The start of the summer season is delayed. Most of the traditional events that mark the opening of the tourist season have been scrapped.
No ceremonies will unlock beaches crowded with sunbathers. Parades will be saved for happier times. Concerts, if they are held at all, will be in that virtual space people have learned to live in. Eateries will be packaging their food for holiday weekend take out. Hanging out with friends at the bar will be limited to Zoom gatherings.
For everyone, this is a loss. Business owners, in particular, face potential catastrophic impacts. The window of opportunity is short and immovable.
For the seasonal worker, a unique threat begins to surface. Will these workers have sufficient income over a sufficient period during what is termed their “base year period” to qualify for unemployment in the offseason? Even if so, will their wages earned qualify them for sufficient weekly benefits to carry them through the next offseason?
All the labor and workforce development reports tell the same story. Those who regularly seek offseason unemployment come predominately from the leisure and hospitality sector followed closely by retail. The salaries when there is work are low, and the offseason benefits offer little wiggle room if survival over the dead winter season is contemplated.
The Labor Department also points to another unique element of Cape unemployment, a significant part of that population that annually files for unemployment is older than it is elsewhere in the state.
The slow start to the life-giving tourist season, the uncertainty over the timetable for relaxing restrictions that are particularly harmful to a visitor-based economy, the inability to project business revenues, or government tax flows impact this type of economy in unique ways.
July revenues cannot be made up in October.
Yet, a group often forgotten in stories about the genuine pain felt by others is the seasonal workers, the thousands of county residents whose fall-back plan for the off-season is unemployment.
These are workers whose presence in the county is a necessity for the normal functioning of the economic cycle. Not enough full-time employment exists to absorb these workers in another way.
It is another segment of the county population with its COVID-19 problems. It is a group for whom a slim summer may portend a disastrous winter.
To contact Vince Conti, email vconti@cmcherald.com.