Statewide NewsTexas Unemployment Improved Steadily in 2021, But Obstacles Remain

While Texas has achieved continuous improvement in its unemployment rate during 2021, it has yet to reach its pre-pandemic low.
December 28, 2021
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Unemployment in Texas has stabilized since its sharp spike at the pandemic’s onset, but it still lags behind the nation’s average and the state’s pre-pandemic lows.

December’s numbers won’t be released until the third week of January, but 2021’s trend has been one of stabilized decrease. In April 2020, the unemployment rate jumped to 13.5 percent. By January 2021, it had halved. Last month, unemployment sat at 5.2 percent.

There are still over 740,000 Texans on the unemployment rolls, 42 percent of the high reached in 2020.

Data from TexasLMI.com

Despite the continued struggle with unemployment, Texas’ total employment eclipsed the pre-pandemic high reaching nearly 13 million. Texas continues to be a destination for businesses intent on making a splash in the state’s business-friendly environment — such as Samsung’s $17 billion microchip plant to be built in Taylor, it announced last month.

It’s not just businesses flocking to Texas. This year, Texas led the nation in net population change, adding an estimated 220,000 people while rival states like California and New York hemorrhaged over 350,000 residents each.

The Texan Tumbler

The shift from high tax, more coronavirus-restriction states to relatively low tax, less coronavirus-restrictive states will have implications for years to come. But more people moving to Texas means more competition for the jobs that do exist. It also may help alleviate the workforce dearth that is preventing the state from returning to its pre-pandemic prosperity.

During the pandemic, employers had to compete with government unemployment aid for workers. Because of the forced closures, the federal, state, and local governments increased substantially the funds divvied out to those on the unemployment rolls.

As of September, Texas had divvied out $56 billion in unemployment benefits since the start of the pandemic. In June, it reinstated the work search requirement to receive benefits that had been suspended in 2020.

Four months ago, the unemployment extended benefit, $300 per week on top of the usual $600 per week, ended after Texas dropped below 6.5 percent unemployment. Until then, plus the additional federal aid, for many it was more profitable to pull in unemployment benefits than work their waged job.

While exact numbers are not available, many employees in Texas have been let go or soon will be for not adhering to vaccination policies despite Governor Greg Abbott’s executive order prohibiting public or private vaccine mandates.

Rice University’s vaccine mandate goes into effect on January 4. Texas National Guardsmen risk losing drill pay, or their jobs entirely, if they don’t adhere to the Secretary of Defense’s policy. United Airlines says that its employees must still be vaccinated in accordance with federal requirements.

The state legislature was tasked by Abbott with passing a law banning vaccine mandates late in the third special session, but it went nowhere. Abbott has not called another special session to take up the issue despite calls from some legislators and the Texas GOP.

Three federal vaccine mandates — one through OSHA, another for federal contractors, and a third through the Centers for Medicare and Medicaid Services — are each being challenged in court.

This year began with a new administration intent on approving more coronavirus relief funding and will end with steady improvement strewn with tension over terms of employment.

Being the economic engine that it is, Texas is well-suited to continue the improvement, but the path is not without obstacles to employment and the added prosperity it brings.

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Brad Johnson

Brad Johnson is an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad quoting Monty Python productions and trying to calculate the airspeed velocity of an unladen swallow.

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