TUESDAY, April 16, 2024
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6.6 million Americans filed for unemployed last week, bringing the pandemic total to over 17 million

6.6 million Americans filed for unemployed last week, bringing the pandemic total to over 17 million

WASHINGTON -- The surge of job losses continued last week with 6.6 million Americans applying for unemployment benefits, the Labor Department said Thursday.

More than 17 million new jobless claims have been filed in the past four weeks, a rapid and unprecedented escalation in unemployment in the United States since the week that President Trump declared a national emergency because of the novel coronavirus.

The 17 million figure includes new reporting from the Labor Department that even more people filed for unemployment in the prior week, pushing the jobless claims up during the week ending March 28 to a record 6.9 million, up from 6.6 million.

Top government and health officials have ordered a sweeping closure of businesses in an effort to fight the deadly coronavirus by keeping workers and customers at home, but the side effect has been a massive rise in unemployment. Janet L. Yellen, one of the world's top economists, said the U.S. unemployment rate has jumped to at least 12% or 13% already, the worst level of joblessness the nation has seen since the Great Depression.

"It looks like the unemployment rate is headed to 15%," said Chris Rupkey, chief financial economist at MUFG Bank, in a note to clients. "This isn't a recession, it's the Great Depression II."

As tens of thousands of businesses closed because of shelter in place orders in more than 40 states, the hospitality sector - hotels, restaurants and amusement parks - weathered the steepest losses. In the week ending March 28, California reported that 872,000 workers from service industries filed for unemployment.

Now, nearly every sector of the economy is shedding workers, including manufacturing, construction and even health care facilities outside of hospitals. In Texas, which reported 121,000 newly unemployed in the week ending March 28, jobs were lost in food services, manufacturing, mining, agriculture, forestry, health care, waste management, transportation and warehousing, among other sectors.

"Today's report continues to reflect the purposeful sacrifice being made by America's workers and their families to slow the spread of the coronavirus," said Labor Secretary Eugene Scalia in a statement.

The Dow Jones industrial average jumped more than 400 points Thursday as investors cheered further government actions to combat the economic devastation wrought by the coronavirus pandemic. Treasury Secretary Steven Mnuchin also said it's possible the economy could re-open for business in May.

The stock market surge came after the Federal Reserve unveiled over $2 trillion in new lending to businesses of all sizes, as well as struggling city and state governments. Fed Chair Jerome H. Powell said that the nation's top priority is fighting the pandemic and caring for the ill, but the central bank is doing whatever it takes to provide economic relief.

"The Fed's role is to provide as much relief and stability as we can during this period of constrained economic activity, and our actions today will help ensure that the eventual recovery is as vigorous as possible," Powell said.

On top of the Fed's historic actions, the federal government has been scrambling to get checks and loans into the hands of workers and companies to buoy employment and keep paychecks flowing, but job losses have continued to build, even after Congress passed a historic $2 trillion relief package. Businesses small and large are struggling to get loans. As companies run out of cash, they are cutting workers and telling them to file for unemployment benefits. But many states have been slow to distribute money.

It takes two to three weeks to process someone's unemployment claim in normal times. Since Trump declared a national emergency on March 13, state unemployment systems have been overrun, causing even longer delays.

Florida started handing out paper unemployment applications this week because the state's jobless claims website kept failing. In New York, laid off workers are having to call hundreds of times to complete their applications.

As unemployment checks are slow to arrive, people are turning to whatever aid they can find. Modern day "bread lines" have started appearing in cities like Orlando, San Diego, Pittsburgh and Cleveland where thousands lined up for free food. The slow release of funds in the United States is a marked contrast from Denmark where the government is paying workers 75% of their salaries during the pandemic, and Canada, which vowed to get money to workers in 10 days or less.

"There were already hurdles to accessing unemployment benefits before the pandemic hit. Many states had done everything they could to reduce access to benefits. Well, now we are seeing the result," said Michele Evermore, a senior policy analyst at the National Employment Law Project.

Tammy Devitoe was so desperate for money after losing her waitress job on March 11, and waiting weeks for help from the state of New York, that she started a GoFundMe page asking for donations. She applied on March 12 for unemployment, but the online form said she needed to call to complete her application. "That's when the horror began," she said.

She called every day, sometimes dialing a hundred times. She always got a busy signal or recording saying to try again later. Devitoe finally got through on March 31. She expects her first payment on Monday - a month after she started her application.

"How are people supposed to live a whole month without income," said Devitoe, a single mom living paycheck to paycheck. "I've had to resort to begging online to complete strangers just so I can have enough money to eat and pay my bills."

Devitoe was so thankful that more than a hundred people gave money to her GoFundMe, but she also received numerous messages berating her for not saving and telling her to get a grocery store job.

Economists say the millions of workers likely to file for unemployment in April will strain America's safety net programs even more. They are urging companies to furlough workers instead of doing a full layoff. A furlough usually allows workers to keep their health insurance and return quickly when business resumes. But many companies have cut ties entirely, leaving workers with no income and bills piling up in the midst of a pandemic.

Unemployment benefits typically cover less than half a worker's salary, but the $2 trillion relief package passed by Congress directed states to give an extra $600 a week to people out of work, including self-employed and gig workers. The Trump administration issued rules Sunday night for states to begin disbursing that extra money, but state officials say it will take time to process all the applications. Many states have not even set up a process yet to handle applications from self-employed workers like hairdressers and Lyft drivers.

"Understand that it takes approximately 25-30 minutes to file one claim," tweeted Mike Ricci, spokesperson for Maryland Gov. Larry Hogan (R). He said staff were working round-the-clock, but there was only so much they could do given the state received more claims in March alone than all of 2019.

Kansas Labor Secretary Delía García urged people to keep calling. She said Kansas, like Maryland, has brought in more staff to help, but it's hard to train new people in a work from home environment.

"No, we are not hanging up on you because we don't like you. We love you. We want to support you," García said on a Facebook Live chat this week.

Labor economists have urged Congress to give more money to states to help strengthen staffing and technology in unemployment offices. States with better websites have tended to move faster, as have states where the revenue department shares data with the unemployment office to make it easier to verify past income.

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