36m have lost jobs in 2 months in US
Scattershot reopenings of retail stores, nail salons and restaurants around the country have not halted the flood of layoffs, with the government reporting on Thursday that nearly three million people filed unemployment claims last week, bringing the two-month tally to more than 36 million.
Although the weekly count of new claims has been declining since late March, job losses from the coronavirus pandemic continue to mount. The labour department said last week that the official unemployment rate in April might have been close to 20 per cent if not for data-collection errors.
“This is a very protracted, painful situation for the labour market,” said Rubeela Farooqi, chief US economist at High Frequency Economics, “and I just don’t see anything positive”. As shelter-in-place restrictions have been rolled back in roughly half of the states, some employees are being called back to work.
But because of lags in data on those receiving jobless benefits after their initial claims, the extent of rehiring is not reflected in the latest labour department report.
Michelle Meyer, head of US economics at Bank of America, said that even with the reopenings, she doubted that callbacks to work outnumbered additional layoffs from other sectors. The slowdown has been rippling beyond the early shutdowns in retail and hospitality to professional business services, manufacturing and health care.
“In a sense, it’s a rolling shock,” she said.
State unemployment insurance and emergency federal relief were supposed to tide households over during the shutdown. But several states have a backlog of claims, and applicants continue to complain of being unable to reach overloaded state agencies.
According to a poll for The New York Times in early May by the online research firm SurveyMonkey, more than half of those applying for unemployment benefits in recent weeks were unsuccessful.
And 13 states have yet to fully put in place the Pandemic Unemployment Assistance that Congress passed in March to help freelancers, the self-employed and other workers not normally eligible for state jobless benefits.
Some of those being called back to work have never seen a penny of government aid.
Jason Cooper, 43, went back to his serving job at the Savour restaurant in Tallahassee, Florida, in early May without ever receiving the jobless benefits he spent weeks trying to track down.
He was furloughed on March 14 and tried for the next month to file for government aid. In mid-April, a few days after he successfully submitted a claim, his employer secured a loan and began paying workers again.
Cooper was lucky — he had some savings that helped cover four weeks without income, and he temporarily moved in with his mother in St Augustine, Florida. He plans to wait out the pandemic before trying to go to a state office to claim the backdated benefits he believes he is owed.
“It was so difficult to get through the first time that I have no real faith that the system is going to work anytime in the near future,” he said.
Fewer than half of Floridians with certified unemployment claims have begun to receive benefits.
At first, Cooper was concerned about returning to work, but now he feels comfortable in the small restaurant, where employees are not wearing masks but are using single-use gloves for serving. Tables have also been spaced farther apart. “It feels shockingly normal,” he said.
Other workers who have been called back say they are scared of getting sick but feel they have no choice. Some states are taking a hard line. Nebraska posted a notice online declaring that failing to return to work “could be considered fraud” and potentially disqualify people from receiving benefits.
In South Carolina, workers are not eligible for benefits if they don’t work because they are isolating themselves to avoid exposure to the virus or have to care for children while schools are closed.
Sarah Parker, 26, a customer service manager at a store in Chillicothe, Ohio, was asked by her employer last week to prepare to return to work in a small shopping center.
“On one side, I really love my job — it’s my favourite place to be,” she said. “On the other hand, I’m petrified. I’m afraid I’m going to put myself at way more risk working harder for less pay.”
She estimates that her new paycheque will be half of the roughly $800 a week that she received in government aid, but said she did not want to subsist on benefit payments.