Last Week, 1.6 Million People Claimed Jobless Benefits — 10 Times More Than in All of 2019

One-stop operator Vickie Gregorio with the Heartland Workforce Solutions updates a white board outside the workforce office in Omaha, Neb., on July 15, 2020, as those seeking employment await their turn outside. (AP Photo/Nati Harnik)

(CN) — Days after the government reported a nationwide decline in unemployment and an uptick in available jobs, the Labor Department shared bad news Thursday with its announcement that the population receiving unemployment insurance remains at high 9%.

Americans meanwhile continue to apply for unemployment benefits at record rates. Last week 1.6 million Americans filed new claims for jobless benefits.

States report receiving 857,148 new claims from covered individuals who meet wage and work requirements to qualify for benefits, as well as 838,916 claims under the Pandemic Unemployment Assistance program, which extends eligibility to gig workers and entrepreneurs not normally covered by employment insurance. 

At this time last year, states reported processing 160,342 claims, a tenth of the 1.6 million received the first week of September. With a 100,000-claim increase from last week, that marks the fourth week of claim increases since August.

In all, 29.6 million Americans are receiving jobless benefits, a number that rivals the population of Texas and remains little changed from the previous week

On average 35,000 people tested positive for Covid-19 daily over the last week — the lowest weekly rate since the first week of July. To date, 6.38 million Americans tested positive for Covid-19 and 191,000 have died.

Though an insured unemployment rate below 10% may appear to indicate progress, many uncertainties remain between the expiration of federal aid and more temporary furloughs becoming solidified into permanent layoffs.  

The Bureau of Labor Statistics reported 6.6 million jobs opened in July, while roughly 14.9 million Americans were out of work.

To control the spread of Covid-19 through a tourist-dependent town in central Colorado, the Manitou Springs Penny Arcade attempts to enforce social distancing and masking. (Courthouse News photo/Amanda Pampuro)

“This translates into a job seekers ratio of 2.3 to every job opening,” wrote economist Elise Gould for the Economic Policy Institute. “Another way to think about this: for every 23 workers who were officially counted as unemployed, there were only available jobs for 10 of them. That means, no matter what they did, there were no jobs for 8.3 million unemployed workers.”  

Officially, the Bureau of Labor Statistics counted 8.4% of workers as unemployed in August. Counting potentially misclassified participants who were absent from work as well as those who stopped looking for work, at least 11.5% of Americans were out of a job in August. 

While unemployment dropped to 7.3% among whites, the rate remains at 13% for Black Americans, 10.5% for Hispanics and 10.7% for Asians. 

These disparities in recovery reflect disparities in the job market and are a pattern that economists noted in previous recessions following 9/11 and 2008. 

“Firms do not appear to be treating Black and white laborers as homogeneous, as attested by the finding that African American workers suffer from higher unemployment rates with higher volatility, lower median incomes, and they are more likely to work in the service sector, than their white counterparts,” concluded Ehab Yamani, a professor of finance at Chicago State University in a paper using past recessions to project the economic impacts of Covid-19. 

“White employment causes African American employment,” Yamani explained in an interview. “Unemployment first decreases in the white sector, followed by unemployment in the African American labor market. When the market is booming, the market fills white employment first and then if the market still needs more employment, it is going to be filled by the by the Black community.” 

Yamani said the data points to a need to give targeted aid to Black workers hardest hit by the pandemic otherwise the cycle is likely to continue. 

Research collected from the Dallas Fed’s Real Time Population Survey also tracked racial disparities through who is able to work from home and therefore at decreased risk of contracting Covid-19. 

As of August about 49% of commuters had resumed work at their place of business, with 26.1% of white workers still working from home, compared to 9.4% of Black workers.

At 20.3%, Hawaii reported the highest insured unemployment rate in the country to the Department of Labor last week, followed by Puerto Rico and Nevada, both at 16%. 

With 22,647 new claims, California reported the highest increase in new applications for benefits, followed by Texas and Louisiana.

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