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Texas Economy Takes A Big Hit Due To Pandemic And Oil Crisis

AILSA CHANG, HOST:

Around the country, more than 26 million people are out of work. It took just five weeks to reach that grim milestone. Social distancing because of the coronavirus pandemic has decimated whole sectors of the economy. Gyms, restaurants, shopping malls, for the most part, are all closed. And in Texas, the problem is compounded by the fact that the demand for oil has plummeted. Texas leads the nation in oil production.

For more on how Texas is doing, we're going to go now to Ed Serna. He's executive director of the Texas Workforce Commission, which provides unemployment benefits in the state.

Welcome.

ED SERNA: Good afternoon.

CHANG: So what has it been like for your agency to handle this flood of unemployment claims over the last few weeks?

SERNA: It's been absolutely unprecedented. We've successfully handled hurricanes - significant hurricanes like Hurricane Harvey - Great Recession, flooding in South Texas and ice storms in North Texas and fires in Central and East Texas. But nothing at all - absolutely nothing at all has compared to this. We are already at about 250-plus percent of all the claims we took in 2019, and we're not really seeing an end to the tunnel yet.

CHANG: That's extraordinary. You know, since mid-March, I read that at least 1.3 million people have filed unemployment claims in Texas, and there also have been reports that people are having a hard time getting through to busy call centers. So I'm wondering, is it possible that there are actually more than 1.3 million people who are newly unemployed in your state, but many of them just haven't been able to file claims yet?

SERNA: Yes, ma'am. We've - we know that probably through yesterday - that number's increased, by the way, to over 1.7 million. And we paid out over 1.7 billion to date, and we started keeping track of this back at the beginning of March. But we do know that there are more people that still need to get to us. We know that what we're doing to help them is not just providing money, but a lifeline.

We've done a lot of things. We've increased the capacity of our computer systems by doubling them and then doubling them again. We had four call centers that we operated with about 400 people in them. We now have four call centers in addition that are outside call centers that, by this Friday, will add a grand total of about another, oh, probably 1,200 people to that original 400 people. The interesting thing is most claims come to us online, though - 96%.

CHANG: Are there problems there?

SERNA: There were some problems early on, and that's why we increased the capacity of our system. We doubled it and doubled it again.

CHANG: You added servers. Yeah.

SERNA: Yes, ma'am. We had - we doubled all that and then doubled all that again. We're up to 20 servers now. Plus, this is an old system that runs on a mainframe computer.

CHANG: Oh, boy.

SERNA: And we're doing everything we can to keep that thing going, too.

CHANG: Yeah.

SERNA: And it is working good - but to keep it going, too. But we know there's more that still need help.

CHANG: I want to turn to the oil industry. I mean, we've been hearing a lot about how the oil industry has been taking a huge hit with the price per barrel sinking into the negative on Monday. Texas obviously relies heavily on the oil industry, so what kinds of ripple effects are you seeing in your state right now?

SERNA: Well, we're beginning to see that population of worker entering the system or needing to enter the system, and it is steadily growing week over week. And then, of course, there's a trickle effect - all the associated businesses that rely on providing services to the oil industry. Some of those services are small, like, you know, restaurants in small towns out in West Texas...

CHANG: Sure.

SERNA: ...Where some of the oil fields - or South Texas where some of the oil fields are located are also being affected. So we've sort of had a one-two punch in the state, to kind of quote the title off of a recent Texas Monthly magazine. But in addition to that from our workload, the CARES Act, which we are very glad - expands the number of people that are available - or that can access pandemic unemployment assistance, although self-employed and contract employees are sort of a one-two-three punch for our system.

CHANG: That is Ed Serna. He is the executive director of the Texas Workforce Commission.

Thank you very much for joining us, and good luck to you and your state.

SERNA: Thank you very much for having me. I appreciate it. Transcript provided by NPR, Copyright NPR.