Please ensure Javascript is enabled for purposes of website accessibility
A Record 10 Million Sought US Jobless Aid in Past 2 Weeks
gvw_ap_news
By Associated Press
Published 4 years ago on
April 2, 2020

Share

WASHINGTON — More 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 outbreak.

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 few weeks — far exceeding the figure for any corresponding period on record.

“This kind of upending of the labor market in such a short time is unheard of.” — Heidi Shierholz, an economist at the Economic Policy Institute, a progressive think tank 

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 have shut down across the world.

“This kind of upending of the labor market in such a short time is unheard of,” said Heidi Shierholz, an economist at the Economic Policy Institute, a progressive think tank.

Further signs of a surging wave of layoffs are likely in the coming weeks. Seth Carpenter, an economist at Swiss bank UBS, estimates that about one-third of last week’s claims had been delayed from the previous week, when state offices that handle unemployment benefits were overwhelmed by a surge of online and telephone claims. Yet many of those offices are still struggling to process all the claims they have received, suggesting more claims will be pushed into the following week.

The magnitude of the layoffs has 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.

Roughly 90% of the U.S. Population Under Stay-At-Home Orders

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.

Roughly 90% of the U.S. population is now under stay-at-home orders, which have been imposed by most U.S. states. This trend has intensified pressure on businesses, most of which face rent, loans and other bills that must be paid.

The reversal in the job market has been dizzying. Four weeks ago, weekly unemployment claims amounted to only 211,000, near a 50-year low. Since then, they have jumped 30-fold.

“Four years of jobs gains have evaporated in the span of two weeks,” said Daniel Zhao, an economist at the jobs website Glassdoor.

Requests for jobless aid soared in all 50 states last week. In California, nearly 900,000 people sought benefits, almost four times the previous week’s figure, and equivalent to 5% of the state’s workforce.

In Michigan, jobless claims more than doubled last week to 311,000. In Florida, filings tripled to 227,000. In South Dakota, they quadrupled to 6,645.

How long the waves of layoffs last — an unknown — will be a key factor in determining the depth of the recession. Some companies are maintaining ties to laid-off workers, in hopes of rehiring them once the coronavirus outbreak passes. Relatively swift rehirings would help the economy rebound quickly. But if business shutdowns persist into the late summer or fall, many smaller businesses will likely go bankrupt. That would make it harder for workers to find jobs and would prolong the downturn.

People waiting in line for help with unemployment benefits
FILE – In this March 17, 2020 file photo, people wait in line for help with unemployment benefits at the One-Stop Career Center in Las Vegas. A record-high number of people applied for unemployment benefits last week as layoffs engulfed the United States in the face of a near-total economic shutdown caused by the coronavirus. The surge in weekly applications for benefits far exceeded the previous record set in 1982. (AP Photo/John Locher, File)

Reforms Are Crucial at a Time When Most Economic Activity Is at a Standstill

The $2.2 trillion rescue package that was signed into law last week includes $350 billion in small business loans that can be forgiven if the companies use the money to retain or rehire workers. This provision could help limit future layoffs or lead some companies to recall employees back to work.

“The huge volume of new claims suggests that at least some states are being as inclusive and expansive as possible in defining who qualifies. That’s important.” — Rebecca Dixon, executive director of the National Employment Law Project

“The program is unprecedented, generous and ambitious and could be successful,” said Luke Tilley, chief economist at Wilmington Trust. “That said, it is challenging to roll out quickly.”

The economic rescue package also 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.

Those reforms are crucial at a time when most economic activity has come to a standstill, advocates for low-income workers say.

“The huge volume of new claims suggests that at least some states are being as inclusive and expansive as possible in defining who qualifies,” said Rebecca Dixon, executive director of the National Employment Law Project. “That’s important.”

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.

State Unemployment Agencies Struggle to Keep up With Flood of Applications

“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.

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, for example, 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.

RELATED TOPICS:

DON'T MISS

Caitlin Clark and Iowa Draw Nearly 5 Million Viewers for Second-Round NCAA Win

DON'T MISS

Canadian School Boards Sue Snapchat, TikTok and Meta for Disrupting Students’ Education

DON'T MISS

California Law Enforcement Agencies Obstruct Transparency Efforts in Use-of-Force Cases

DON'T MISS

No Police Charges for Taylor Swift’s Dad Over Paparazzi Incident in Sydney

DON'T MISS

Biden Administration to Lend $1.5B to Restart Michigan Nuclear Power Plant, a First in the US

DON'T MISS

Tonight’s Biden Fundraiser With Obama and Clinton Already Nets a Record $25 Million

DON'T MISS

Former Sen. Joe Lieberman, Democrats’ VP Pick in 2000, Dead at 82

DON'T MISS

Trump Criticizes Judge and His Daughter After Gag Order in Hush-Money Case

DON'T MISS

Police Had About 90 Seconds to Stop Traffic Before Baltimore Bridge Fell. 6 Workers Are Feared Dead

DON'T MISS

NBC Has Cut Ties With Former RNC Head Ronna McDaniel After Employee Objections, Some on the Air

No data was found

Facebook News Tab Will Soon Be Unavailable as Meta Scales Back News and Political Content

9 hours ago

Stock Market Today: Wall Street Rises to More Records to Close Out Its Latest Winning Month

10 hours ago

A Fresno County First: Kerman Council Passes Amended Gaza Cease-Fire Resolution

10 hours ago

UN Top Court Orders Israel to Open More Land Crossings for Aid into Gaza

10 hours ago

How Involved Is Southern California Consulting Firm in FUSD Executive Dealings?

10 hours ago

Biden’s Fundraiser with Obama and Clinton Nets a Record $25 Million, His Campaign Says

11 hours ago

Fresno Unified’s Self-Protection Racket Is Hurting Our Kids

11 hours ago

Rockin’ Out or Laughing, the Valley Has Its Pick of Weekend Events

12 hours ago

Ex-Correctional Officer at Women’s Prison in California Sentenced for Sexually Abusing Inmates

14 hours ago

Caitlin Clark and Iowa Draw Nearly 5 Million Viewers for Second-Round NCAA Win

14 hours ago

PGA HOPE at Riverside Golf Course Introduces Military Veterans to the Game

PGA HOPE, now underway at Fresno’s Riverside Golf Course, is designed to introduce golf to veterans and active duty military members t...

8 hours ago

PGA HOPE at Fresno's Riverside Golf Course
8 hours ago

PGA HOPE at Riverside Golf Course Introduces Military Veterans to the Game

9 hours ago

Cronenworth’s Big Hit Helps Lift the Padres to a 6-4 Win Over Melvin’s Giants

9 hours ago

Shohei Ohtani Reaches 3 Times in Home Debut as the Dodgers Rout the Cardinals 7-1

9 hours ago

Facebook News Tab Will Soon Be Unavailable as Meta Scales Back News and Political Content

10 hours ago

Stock Market Today: Wall Street Rises to More Records to Close Out Its Latest Winning Month

10 hours ago

A Fresno County First: Kerman Council Passes Amended Gaza Cease-Fire Resolution

10 hours ago

UN Top Court Orders Israel to Open More Land Crossings for Aid into Gaza

10 hours ago

How Involved Is Southern California Consulting Firm in FUSD Executive Dealings?

MENU

CONNECT WITH US

Search

Send this to a friend