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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowMore than 6.6 million Americans applied for unemployment benefits last week—doubling a record high set just one week earlier—a sign that layoffs are accelerating in the midst of the coronavirus.
The stunning report Thursday from the Labor Department showed that job cuts are mounting against the backdrop of economies in the United States and abroad that have almost certainly sunk into a severe recession as businesses close across the world.
The report follows Tuesday’s news that Indiana saw initial unemployment insurance claims surge to 120,331 last week, up from just 2,312 two weeks ago, according to the Department of Workforce Development.
Applications for unemployment benefits generally reflect the pace of layoffs. Combined with last week’s report that 3.3 million people sought unemployment aid two weeks ago, the U.S. economy has now suffered nearly 10 million layoffs in just the past several weeks—far exceeding the figure for any corresponding period on record.
Some of last week’s jobless claims are likely delayed filings from the previous week, when state offices that handle unemployment benefits were overwhelmed by a surge of online and telephone claims.
The accelerating layoffs have led many economists to envision as many as 20 million lost jobs by the end of April. That would be more than double the 8.7 million jobs lost during the Great Recession. The unemployment rate could spike to as high as 15% this month, above the previous record of 10.8% set during a deep recession in 1982.
Many employers are slashing their payrolls to try to stay afloat because their revenue has collapsed, especially at restaurants, hotels, gyms, movie theaters and other venues that depend on face-to-face interaction. Auto sales have sunk, and factories have closed.
More than two-thirds of the U.S. population are under stay-at-home orders, imposed by most U.S. states. That has intensified pressure on businesses, most of which face rent, loans and other bills that must be paid.
The White House and Congress expanded the unemployment benefits system in last week’s $2.2 trillion economic rescue package. That legislation added $600 a week in jobless aid, on top of what recipients receive from their states. This will enable many lower-income workers to manage their expenses and even increase their purchasing power and support the economy.
It also makes many more people eligible for jobless aid, including the self-employed, contractors, and so-called “gig economy” workers such as Uber and Lyft drivers.
Kathryn Lickteig, a cook in Kansas City, signed up for unemployment compensation last week after the city shut down dine-in restaurants. She is hopeful that the extra $600 will help her ride out the shutdown instead of having to look for an interim job.
“It has eased my mind so much,” she said. “I do not have to actively go out and expose myself to the public and possibly get sick. I can stay home now and do my part in social distancing.”
The legislation will also help fund unemployment benefits for workers whose hours have been cut. That would enable these people to replace some of their lost income with unemployment aid even as they keep their jobs.
About 26 states allow workers with reduced hours to claim benefits. Most economists support doing so because it encourages companies to cut back on hours rather than lay off workers. Any program that encourages companies to maintain connections with their workers can help the economy rebound faster after the virus outbreak is contained.
Typically, people who receive jobless aid are required to actively look for a new job and to document their searches. But Congress has passed other legislation that encourages states to drop that requirement, given that so many businesses are closed, and most Americans have been ordered to stay mostly at home.
Mark Zandi, chief economist at Moody’s Analytics, said this week that just 6% of companies surveyed by Moody’s say they’re hiring — down dramatically from 40% in the weeks preceding the coronavirus outbreak. The plunge in hiring underscores the difficulty that anyone out of work would have finding a new job.
On Friday, the government will issue the March jobs report, which economists forecast will show a loss of 145,000 jobs. That report is based on data gathered mostly before the spike in layoffs began two weeks ago. Though relatively small, that loss would still end a record-long 113-month streak of job growth.
Numerous state unemployment agencies have struggled to keep up with the flood of applications for jobless benefits. New York’s Labor Department asks people to file on different days depending on their last names. Monday, for example, is reserved for those last names that start with A through F.
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Flattening curve as they say or Cure may be worst than cause ! A question not answered yet as far as I know is how many deaths directly attributable to virus in contrast to deaths who also contracted virus but virus not sole or probable cause of death..Believe there may be a difference if reported correctly…Only a thought while our country withers away….
Would things be better if 1% of the whole US population dies without hospital care in the next 60 days, and everyone else is too sick to work?
For those surprised at how many people signed up for unemployment, take a look at this Fed Dept of Labor Q&A website: https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.dol.gov%2Fagencies%2Fwhd%2Fpandemic%2Fffcra-questions&data=02%7C01%7C%7C116531aff74a4425069d08d7d4d92abf%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C637211901496969485&sdata=x3zVIGhi8JbmTZnKKFOQBsf6QIoarXqlPLTfhSN25eQ%3D&reserved=0
Scroll, scroll down to 23 & 24:
23. If my employer closed my worksite before April 1, 2020 (the effective date of the FFCRA), can I still get paid sick leave or expanded family and medical leave?
No. If, prior to the FFCRA’s effective date, your employer sent you home and stops paying you because it does not have work for you to do, you will not get paid sick leave or expanded family and medical leave but you may be eligible for unemployment insurance benefits. This is true whether your employer closes your worksite for lack of business or because it is required to close pursuant to a Federal, State, or local directive. You should contact your State workforce agency or State unemployment insurance office for specific questions about your eligibility. For additional information, please refer to https://www.careeronestop.org/LocalHelp/service-locator.aspx.
It should be noted, however, that if your employer is paying you pursuant to a paid leave policy or State or local requirements, you are not eligible for unemployment insurance.
24 If my employer closes my worksite on or after April 1, 2020 (the effective date of the FFCRA), but before I go out on leave, can I still get paid sick leave and/or expanded family and medical leave?
No. If your employer closes after the FFCRA’s effective date (even if you requested leave prior to the closure), you will not get paid sick leave or expanded family and medical leave but you may be eligible for unemployment insurance benefits. This is true whether your employer closes your worksite for lack of business or because it was required to close pursuant to a Federal, State or local directive. You should contact your State workforce agency or State unemployment insurance office for specific questions about your eligibility. For additional information, please refer to https://www.careeronestop.org/LocalHelp/service-locator.aspx.
Jim W has a good point. At 74 years, I do worry about my life expectancy, especially living in a state with a life expectancy of 77.1 years, and compared to 6,692,000 people in the state, with 87,796 on average die each year. On the other hand, I worry more that my children may not have jobs or a livelihood when we come back out. We have to pray our state and national leaders put aside the pettiness and make good decisions as we wait it out.