A local economic expert expects Dubuque County’s unemployment rate to climb to more than 10% this spring and stay there through August.
Those figures would eclipse the highest local unemployment rate during the Great Recession that started in December 2007 and lasted 18 months.
The soaring rate will be tied to the COVID-19 pandemic that has prompted the full or partial closure of many businesses in the county and across the state and country, according to Rick Dickinson, executive director of Greater Dubuque Development Corp.
He provided the economic update Monday during a meeting of the Dubuque County Board of Supervisors, his voice on loudspeaker in the courthouse chamber.
“I wish I was the bearer of better tidings,” he said.
Two more cases of COVID-19 in Dubuque County residents were confirmed Monday, bringing the county’s total to six, while businesses throughout the area sit shuttered or operating only at less-than-full strength.
Dickinson drew on his organization’s knowledge of local businesses and demographics with data from the Iowa Economic Development Authority to make economic projections for the months ahead, in light of the pandemic.
Dubuque County’s unemployment rate sat at 4% in January, the most-recent month for which figures have been released. Dickinson said local residents should expect that figure to climb into double digits in the coming months.
Dickinson expects the biggest contributor will be the lasting impacts of the ordered closures of the state’s bars, hotels and other hospitality and entertainment venues, as well as the restrictions on restaurants.
“Here, 600 people is 1% of our workforce,” he said of Dubuque County. “There were just shy of 6,000 people working in that (hospitality) industry.”
Dickinson said some of those businesses have held their layoffs to about 70%, operating “skeleton crews,” but that will continue to decrease.
“The chickens come to roost in March,” he said. “Based on what we know with the unemployment rate, for half of March (it) will be 6%. ... April hits hard, bringing it to 9%. The unemployment rate of the months of May, June, July and August, unemployment will be over 10%.”
County Supervisor Dave Baker said he was receiving calls from employers.
“It was made known to me that a major downtown hotel did not have anyone check in on one of the main weekend days this week,” he said.
Supervisor Ann McDonough asked Dickinson to put this in a historical perspective.
He said that if he is right, this would be the second-darkest economic period for Dubuque since the Great Depression.
He noted that in 1983, with the collapse of the agricultural industry and subsequent economic tailspin, unemployment in the area rose to 23%.
Other than that, the expected unemployment level is unprecedented in modern history.
“When Dubuque was in the bowels of the worst recession since the Great Depression, in 2008 and 2009, the highest unemployment rate we had was (7.8%),” Dickinson said. “And the ripple effect of the impact of the reduction of consumer spending could increase it significantly.”
The GDDC and partners at Northeast Iowa Community College are working to soften that blow.
“The important thing is to understand the systems available from the local, state and federal governments ... to help small businesses and businesses of any kind,” Dickinson said.
For instance, NICC is preparing to help businesses applying for relief loans from the U.S. Small Business Administration.
“We know that the SBA grant, there’s a lot of paperwork that goes along with that,” said Wendy Mihm-Herold, NICC vice president of business and community solutions. “Our businesses are under extreme pressure right now. We are looking at how we can gear up — the NICC partners — and host the SBA and Small Business Development Center services for our county. We’re looking at how we can expand our counseling services.”
She said NICC’s current counselors will focus on impacted small businesses in the coming months rather than new businesses. NICC also is looking to bolster its ranks.
“We have some ideas of some folks who have retired who will be willing to come in and assist us and get them trained up to provide those services for our businesses,” Mihm-Herold said.