Arizona economy could withstand brief shutdown, economist says
PHOENIX – Arizona’s financial resources could survive a short shutdown to slow the spread of the coronavirus, a Valley economist said, but any longer could be a problem.
“If we shut down and it’s just going to be three weeks, I don’t think you’re going to see the types of layoffs we had before,” Jim Rounds, president of Rounds Consulting Group, told KTAR News 92.3 FM on Monday.
“If, however, people are saying it’s an undetermined amount of time, that additional uncertainty probably will result in additional layoffs. Some of the gained jobs we were able to benefit from will be lost again,” he said.
A University of Arizona COVID modeling team recommended the state go into a three-week stay-home shutdown to avoid worsening the virus surge, among other measures.
“We lost a lot of jobs [in the spring] but when the economy partly reopened, we got a lot of those jobs back pretty quickly, within about a month or two,” Rounds said.
More than 418,000 people filed for unemployment for the first time in their lives during late March and into April, according to the Arizona Department of Economic Security, after a stay-at-home order went into effect.
The state paid out a record $151 million in unemployment benefits the week ending April 18.
By late August, the state said it had distributed more than $10 billion in unemployment insurance, pandemic unemployment assistance, federal pandemic unemployment compensation and lost wages assistance since the week ending March 7.
“If the government entities decide to shut down the economy for a couple, three weeks, provide good information, it’s not going to be that devastating,” Rounds said, adding, he believed employers would be hesitant to turn to layoffs.
But, “If they’re a little bit vague, then we’re going to have more people applying for unemployment insurance benefits and it’s going to put additional fiscal strain on the state,” he said.
KTAR News 92.3 FM’s Jim Cross contributed to this report.