2008-10 and 2020-? are clearly the most significant periods of unemployment in recent time. The unemployment statistics for just these first couple months of 2020 are staggering. Today’s situation is unique in many ways and our exact future is unknown, but one thing is for sure – just like in 2008, the scale of financial stress is extreme.
Now, “Stay Home” orders in various states are lifting but really what this means is many states are working through “phases” of re-opening. Most of these phases still restrict business – capacity limits, operational limits, continuing full closures (hair salons became a popular example of this).
Will the return to work be as swift as the pause from work? I really don’t think so – there won’t be a global “flip of the switch” with massive return to work within a month or two. Financial stress will remain high for a long time. A few exceptions may be certain industries who push back to the workplace very quickly and credit unions with SEG-specific bases heavy in those industries may see quick changes even while general movement is still sluggish elsewhere in the region and country.
But far and away the conversations I’m having with credit unions lately are about how to find, evaluate, and track the member population that is currently unemployed. People are recognizing we are likely in for the long haul and already looking for the data to watch and evaluate. The top two focuses right now have been:
Will we see the transition back to employed for the majority of my members who began drawing unemployment?
Can I know who these people are? I want to begin proactive outreach and risk analysis.
The first angle to consider is the membership as a whole – Here’s my strategy:
- First, what is the whole volume of ACH deposits?
- Second, what portion of the whole is made up of UI deposits and/or government stimulus money?
- Do the math and comparisons – When the whole is going back up as (hopefully) the UI funds portion declines simultaneously. This will be the that tipping point.
For credit unions I work with, on the CU*BASE core, tracking this general shift in reliance on UI funds can be done regularly and quickly through Tool 1220 Activity Validation Dashboard.
What I just described there is a fantastic way to watch the membership as a whole, but if the preference or need is to track on an individual member basis then the next discussion and tactics have to get into some data questions first – how do we know which membership has been getting each type of deposit and when? The transaction postings are there, but like a raw gem that’s a rough type data to analyze as-is. It needs a little refinement to make it clear what each member’s situation is over time. The refinement and recording can be simple to do, it just needs the front-end work to be done by each credit union who’s interested in tracking over time.
Here’s an example of what one credit union has been able to do to track the detailed situation with their members, available in Chip Filson’s blog post – Tracking Members in Transition in This Crisis
There is data work underneath those results. There is no single tool that will produce all this information at once, but clearly a sharp picture can be drawn if the work is done.