New Fed Data Shows Wolf's Shutdown Caused Unemployment Spike

June 5, 2020, Harrisburg, Pa. — Pennsylvania’s shutdown was done earlier, was more expansive, and had fewer exemptions than most other states, according to the Federal Reserve Bank of Philadelphia. Gov. Tom Wolf’s overly stringent policy and his unwillingness to make needed changes caused a nation-leading unemployment spike.

Notably, according to the Fed, Gov. Wolf’s order did not specify an exemption for remote work while most other states did. Businesses that could have operated remotely to some degree often shut down completely because they were deemed to not be “life-sustaining” and did not see an exemption for remote work.

“Gov. Wolf has kept our state’s local businesses completely in the dark for months as millions of people have lost jobs,” said Commonwealth Foundation Vice President Nathan Benefield. “The shutdown of our economy was so strict, extensive, and confusing that local business owners didn’t know what to do. Many were closed while Wolf allowed their competitors to open.”

For businesses to restart operations, even remotely, they had to go through Pa.’s uniquely confounding waiver process, the operational details of which we still don’t know. The Wolf administration has refused to provide documentation about how they made decisions on waiver requests to the public.

Gov. Wolf’s shutdown polices have caused extreme unemployment:

• The highest number of unemployed people in our state’s history. And the 15.1% official unemployment rate is the highest on record (going back to 1976).
• Hospitality and recreation jobs were hit the hardest, with nearly 60% of payroll jobs eliminated. Construction was also hit hard, with a 40% decline in jobs. Even health care saw more than 10% of jobs eliminated.
• The private sector saw 19.9% of jobs lost. While government jobs (federal, state, and local) declined by a mere 2.9%.

“Time and time again, legislators lobbied the Wolf administration and passed bills to allow some local businesses to operate safely during the height of the shutdown,” said Benefield. “Yet, Wolf refused to listen. He has kept small businesses closed for months based on data that he admits not knowing the reasoning for using. How many community businesses will never return is yet to be seen.”

Meanwhile, tens of thousands of unemployed Pennsylvanians have been unable to get unemployment compensation from state government. The system has been hit with delays, errors, and scams. About 58,000 Pennsylvanians have had their identities stolen.

“Pennsylvania has seen its highest rate of unemployment since the Great Depression, yet hundreds of thousands of laid off workers haven't received their unemployment benefits,” noted Benefield. “Meanwhile, tens of thousand of individuals who didn't lose their jobs got checks anyway because of government mistakes. These workers have neither jobs that pay nor government that works.”

Commonwealth Foundation experts are available for comment. Please contact Michael Torres at 850-619-2737 or mbt@commonwealthfoundation.org to schedule an interview.

# # #

The Commonwealth Foundation transforms free-market ideas into public policies so all Pennsylvanians can flourish.