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COVID-19 Recession in Texas

280,000 more Texans filed for unemployment last week as oil collapse and coronavirus precautions wallop state's economy

The total number of out-of-work Texans is 1.3 million since mid-March as the state's economy continues roiling from business closures, a troubled energy sector and corporate layoffs.

A gas flare in the Eagle Ford oil patch south of San Antonio, TX.

Coronavirus in Texas

As the coronavirus spreads across the state, The Texas Tribune is covering the most important health, economic and breaking developments that affect Texans, every day. Watch our Texas unemployment tracker, use our explainer on the coronavirus for essential information, and visit our map tracker for the number of cases, deaths and tests in Texas.

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The number of Texans filing for unemployment went back up last week, after a dip in the number of claims the previous week.

Last week, 280,406 Texans successfully filed unemployment claims. That brings the running total of unemployed Texans to at least 1.3 million since mid-March, when officials began closing businesses or limiting operations to stop the spread of the novel coronavirus. Nationwide, another 4.4 million Americans applied for unemployment relief last week, marking more than 26 million people who are jobless across the country.

Envelope with money in it

The impact on Texas’ economy

The number of claims filed each week rose from mid-March until the week ending April 11, when the number of claims dipped down to 274,257. But that decline didn’t carry into last week as Texans continued to file new claims with the Texas Workforce Commission.

The real number of people facing job losses is even higher; the Texas Workforce Commission’s website and phone lines have been overwhelmed by millions of queries daily.

State and local orders meant to curb the spread of the new coronavirus have dramatically hurt the economy as companies have reduced employees’ hours, furloughed staffers or laid off workers completely.

Unemployment is hitting Texans across the state. All counties but one, King County, have at least one person filing for unemployment, according to Texas Workforce Commission data. But some counties in particular are seeing higher rates of claims than others.

Residents from Fort Bend County have been particularly hard hit. There were 195,792 people employed there in September, according to federal data, and 26,367 filed unemployment claims from the first week of March through April 11.

Fort Bend, on the outskirts of Houston, relies heavily on the oil and gas industry for employment and the economy. On Monday, the price of oil dropped into the negatives as oil producers ran out of space to store the product. Meanwhile, with Gov. Greg Abbott’s executive order urging Texans to remain home, the demand for gas is extremely low, said Dietrich Vollrath, chair of the economics department at the University of Houston.

“On top of the people that are [unemployed] coming out of retail and restaurants all over, we’ve got people coming out of small manufacturing in the area who do specialty oil work,” Vollrath said. “Nobody’s drilling. Nobody wants more oil … which is just an extra kick in the tail to a place like Houston.”

Kevin McBryde, who works in oil and gas safety management, wrapped up his contract with a Louisiana-based company Friday. His next contract was supposed to start Monday in La Porte, a city east of downtown Houston where McBryde lives.

When his next contract was canceled and pushed back until October, McBryde, a 50-year-old father of four, found himself among the unemployed because of COVID-19.

“We’re living off of savings and the generosity of our church,” McBryde said.

It’ll be another month and a half before McBryde’s savings run dry, he said, and he considers himself “more fortunate” than most people finding themselves out of work.

McBryde successfully filed a claim for unemployment benefits. But after filing a claim, people have to log in again on a designated day to request payment every two weeks.

When McBryde logged in on his assigned day, the system directed him to request payment on Sunday instead. On Sunday, McBryde received yet another message instructing him to request payment Wednesday. As of Wednesday morning, he still hadn’t been able to request payment of unemployment benefits.

“I’ve been working in Texas since 1986, paying into all these benefit programs,” McBryde said. “I could always cook at Sonic, but I'd rather stay in my field. I’ll give it another month, and then I’ll wash dishes. Any paycheck is better than no paycheck.”

In Galveston County, southeast of Houston, 13,541 people have filed unemployment claims since mid-March. In September, there were 110,078 people employed there, per federal data.

Even before Abbott issued his stay-at-home order, spending in restaurants and on retail was “dropping off a cliff,” said Vollrath, the University of Houston economist. Many Texans either lived in urban counties that issued stay-at-home orders before Abbott’s statewide directive or opted to limit going out, Vollrath said, creating a “self-induced” facet to the economic shutdown.

The shuttering of many businesses, compounded with the collapse of the oil and gas industry, helps paint a clearer picture of the high unemployment rates seen in counties in West Texas. It’s not just restaurant servers, bartenders and hospitality workers who are losing their jobs in oil-rich Texas, but also oil and gas workers.

John Diamond, director of the Center for Public Finance at Rice University’s Baker Institute, said in Houston, the weight of the economic downturn isn’t confined to a single socioeconomic class.

“The difference is a lot of the jobs, like restaurants, retail and other jobs, are lower- to median-wage jobs, whereas a lot of the jobs that are being lost in the oil industry are high-wage jobs,” Diamond said. “It’s going to impact a different segment of the Houston population.”

Given the low the price of oil, and individuals' and businesses' minimal consumption of oil products, Diamond said he expects some oil wells will stop producing “sooner rather than later.” Oil companies are struggling to make a profit, Diamond said, forcing them to cut costs and lay off or furlough workers.

Abbott is taking the first steps to reopen the economy, allowing retail store pickups, opening up state parks and loosening restrictions on nonessential surgeries. But if people don’t feel comfortable going to restaurants or visiting local businesses, Vollrath said, governmental orders won’t be what gets the economy up and running again.

“Until people feel safe health-wise going out and being around, that’s what will reopen the economy,” Vollrath said. “It’s less about official guidelines and statements and more people’s feelings about the health risks.”

Disclosure: Rice University and the University of Houston have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.

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