US Job Losses Remain High After 3 Months of Pandemic

After three months of the COVID-19 pandemic, initial unemployment claims are more than twice the worst week of the Great Recession, when 2.2 million workers applied for unemployment benefits last week, Common Dreams reported Thursday.

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Of the 2.2 million who applied for unemployment benefits last week, 1.4 million applied for regular state unemployment insurance (U.I.) on a not-seasonally-adjusted basis, and 0.8 million used Pandemic Unemployment Assistance (PUA).

PUA is the federal program for workers who are out of work because of the virus but who are not eligible for regular U.I. (e.g., the self-employed). At this point, only 44 states, D.C. and Puerto Rico, are reporting PUA claims.

How is it that we are still seeing large numbers of initial unemployment claims now when the May jobs report shows we added jobs? The missing piece is hiring, according to Common Dreams.

If there are a large number of layoffs, there can still be job growth if there is also a lot of hiring (or rehiring). In today's gradually reopening coronavirus economy, hires (or rehires) are now outpacing job losses, but we are still seeing a massive number of people losing jobs. This means the labor market "churn" is vastly higher than in normal times.

Further, some recent unemployment claims may be from people who lost their job in March or April but didn't apply right away (perhaps because they couldn't get through the system).

On the other hand, the PUA figures are very important to understand the seriousness of the situation of workers in the U.S., given that some data are only based on the U.I. claims figures.

Since the COVID-19 crisis hit the United States, at least 34.5 million workers who are either on unemployment benefits or who have applied very recently and are waiting to see if they will get benefits have filed an unemployment claim. That is more than one in five U.S. workers.

However, of the 34.5 million workers "on" unemployment benefits, one-third are on PUA, which exposes a tremendous weakness in regular state unemployment insurance programs and how important it is that Congress established the PUA.

The deep recession urges the policymakers to act as soon as possible to combat the economic and social crisis that the pandemic is leaving in the country and will not happen without substantial additional fiscal aid, according to Heidi Shierholz who leads the Economic Policy Institutes' Perkins Project on Worker Rights and Wages in the U.S.

For example, without massive federal aid to state and local governments, 5.3 million workers in public and private sectors will likely lose their jobs by the end of 2021, so the most important thing now is not to deactivate federal aid too soon, she warned.

Meanwhile, just as everything seems to be slowly returning to "normal," the recession will also exacerbate existing racial inequalities by causing more significant job loss in Black and Hispanic households than in white ones.