The coronavirus pandemic has forced one out of every five U.S. workers to apply for unemployment benefits.
The country passed that grim milestone when another 3.2 million people joined the jobless rolls last week, pushing the seven-week total to more than 33 million, the U.S. Department of Labor reported Thursday.
The good news: Last week’s tally was the lowest since jobless claims exploded in the second half of March, and the number of claims dropped for the fifth straight week.
Before getting too sanguine, the number released Thursday still dwarfed the records for weekly claims set prior to the crisis. Economists predict millions more will sign up in coming weeks.
The onslaught also continues to burden benefits systems in several states, including Florida where hordes of laid-off workers haven’t been able to sign up using the state’s troubled application program. Tens of thousands of others still await their first payment.
Florida’s application system was offline for a day during the most recent reporting period. The closure, plus the ongoing problems with the troubled system, help explain why the number of new claims fell significantly, from 433,103 a week earlier to 173,191 last week.
As of Tuesday, the state Department of Economic Opportunity had verified 1.1 million unique claims and paid a little more than $1 billion to nearly 482,000 workers.
Both the U.S. and Florida’s jobless claims totals likely significantly undercount the number of people who have lost their jobs. Some people aren’t eligible for unemployment benefits. Others try to sign up but get discouraged by the process. A survey by the Economic Policy Institute last month found that for every 10 laid-off workers who file a successful claim, three to four others couldn’t sign up, and two more thought it would be too difficult and didn’t try at all.
For the first time, independent contractors and gig workers are eligible for benefits, but many states have struggled to upgrade their systems to allow those workers to apply. Florida only got its system running at the end of April, and many gig workers remain unable to sign up.
Zephyrhills resident Ron Woodward first applied for benefits in March, when Hilton furloughed him from his job on the hotel chain’s universal help desk. Hilton sent his salary information to the state on March 27. At first, the state deemed him ineligible for benefits. He was told to try again using the state’s upgraded system, which confirmed his eligibility.
His application, though, is still “pending review”, according to the state’s website, and he hasn’t received any payment from the state or the $600 a week the federal government included for laid-off workers in the Coronavirus Aid, Relief and Economic Security Act.
Woodward, 73, is nearly out of cash. His mortgage payment is due, but he doesn’t want to dip into his retirement savings. He wants to start work at Hilton again, but knows it will be weeks, if not months.
“My friend keeps telling me that I’m never getting the money because I’m too worried about it,” Woodard said. “I said, ‘No, I’m not getting my money because the fools that run the system aren’t going to give it to me.' ”
The weekly jobless numbers come a day before the U.S. Department of Labor releases the unemployment figures for April. The rate – 4.4 percent in March – is expected to soar.
James Knightley, the chief international economist at financial services giant ING, forecast 15.8 percent in April and 22 percent in May. Even those numbers – the highest since the 1930s – don’t reflect the full unemployment picture.
The unemployment rate is calculated from a survey taken in the middle part of each month. People who say they are out of work but not actively looking for a job are not included in the official rate. In recent weeks, many states including Florida have waived the requirement to search for work to collect jobless benefits. Others aren’t bothering to look because they don’t think there are any jobs to find. Many of those people will join the growing swath who don’t have a job, but aren’t counted in the unemployment rate.
The employment survey also won’t capture people sick with the virus who are unable to work or staying home to look after children whose schools and daycare centers closed. Others like college students who lose restaurant jobs but decide to classify themselves once again as only students won’t be counted either.
More than half of the country’s working-age population won’t earn a wage in May, when unemployed workers are combined with students, early retirees, homemakers, unpaid caregivers and the disabled, Knightley concluded.
“This is a sobering statistic that underlines the huge economic damage of COVID-19,” Knightley said in his report.
Last year, Florida’s economy grew by 2.8 percent. This year, it will contract by 5.2 percent, according to a report from the Institute for Economic Forecasting at the University of Central Florida released earlier this week. If the prediction holds, the 8 percentage point difference would be the largest one-year slide in recent Florida history.
The report questioned the reliance on untested models that over-estimated the number of people who would die from the virus.
“In an effort to flatten the poorly estimated curve, we have bulldozed the economy,” the report stated. “... COVID-19 is a cautionary tale against using experts’ models that are predicting an apocalypse as a basis for economy-killing remedies without questioning the models, their predictions, and the costs of the proposed remedies.”
The state won’t return to pre-pandemic levels until at least June 2021, the report said, though the state can expect a robust 6.7 percent growth rate next year.
The state’s unemployment rate will fall to 7.6 percent next year, the report predicted, more than double where it was before the pandemic. In 2022, the rate will tick below 4 percent. The largest jobs losses will come from professional and business services, and leisure and hospitality.
“The path and timing of the recovery will also depend on the length of time the public health measures remain in place,” the report said.
In the Tampa Bay area, job cuts disclosed over the past week include:
• 170 Hertz rental car employees laid off in mid-April from the company’s center at Tampa International Airport. This was part of a statewide Hertz mass layoff that eliminated 678 jobs at airports in Tampa, Orlando, Fort Lauderdale and Miami.
• 88 temporarily let go from the Marriott St. Petersburg on Roosevelt Boulevard N.
• 77 temporarily laid off from 11 VisionWorks stores around the Tampa Bay area as part of a larger pullback from the company’s manufacturing and retail operations throughout Florida. The company, which re-opened some stores in early April, has said it expects the furloughs to last no more than six months.
• 43 laid off from their kitchen jobs with Ark Hollywood/Tampa Investment, which runs the food court at the Seminole Hard Rock Hotel & Casino Tampa. (This is a fraction of the workers displaced when the Tampa casino, which has a staff of 4,800, closed on March 20. The Seminole Hard Rock, which is owned by the Seminole Tribe of Florida, said at the time it would pay workers for two weeks beyond the closing.)
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