Insured Unemployment Dips, Iceberg of Job Loss Remains

Many businesses like Fancy Tiger crafts on Broadway in Denver, Colorado, have reopened amid the pandemic. (Courthouse News photo/Amanda Pampuro)

(CN) — Across the U.S. a group equivalent to the population of San Diego filed initial jobless claims last week. Some 1.4 million Americans applied for unemployment benefits on top of the 20.3 million receiving them.

New claims for benefits slowly and consistently declined since April. Thursday’s report by the Department of Labor marks the fourth consecutive week in which new claims for jobless benefits fell below 1.6 million. 

Still many economists warn that U.S. labor market is not on a rebound.

Morning Consult economist John Leer attributed the decline to some part time and furloughed workers returning to their jobs.

“The economy already added the lowest hanging fruit, so to speak,” Leer concluded in a June 30 analysis. “Many part-time workers have found new jobs, and the most desirable furloughed workers (i.e., those receiving full pay) have largely already gone back to work.” (Parentheses in original.)

In a mid-June survey of 2,200 adults, Leer found 5.3% had lost their jobs and 26.8% were on temporary leave, putting the actual rate of job separation at 32.1% among those polled. Furloughed workers paid through closures returned to work at a higher rate than those who went without pay. 

From preserving morale to making it easier to reopen, economists have touted many benefits to placing workers on leave rather than outright firing them, but the distinction has led to inaccuracies in reporting.

As reported by the Department of Labor on Thursday, 13.2% of eligible workers are receiving unemployment benefits, but many economists have argued the unemployment rate is at least 3–5% higher. 

Bars like Hornet on Broadway in Denver celebrated being able to reopen earlier this month, only to reclose under a June 30 order by Colorado Governor Jared Polis. (Courthouse News photo/Amanda Pampuro)

The Bureau of Labor Statistics misreported furloughed workers as absent from their job in May reports, leading the agency to measure unemployment at 13% when it was closer to 16%. In April unemployment was closer to 19.7% when the agency reported it as 14.7%. 

Drilling into the May unemployment data, Pew Research Center estimated unemployment hit 20% among Asian Americans, blacks, Hispanics and immigrants.

Before the Covid-19 collapse, U.S. unemployment hit a record low 3.5% in February.

“We’ve never before had anything remotely close to going from the lowest unemployment rate in 50 years to the highest rate in post-World War II history,” said David Wilcox, a senior fellow at Peterson Institute for International Economics.

“My own guess is that the rebound in the labor market is likely to be very partial and very spotty,” Wilcox added. “It’s going to be affected by how serious the outbreak of the Covid-19 is in a particular area. If the caseload is up, then it simply isn’t going to be practical or responsible to encourage consumers to go out and engage in normal economic activity, or for workers to go to the workplace and be there in person.”

After many states lifted stay-at-home orders in June, the U.S. is reporting surges in new cases of Covid-19, setting a record high of 52,609 new cases firmed on Wednesday. Over the last week, the U.S. reported 42,155 new cases of Covid-19 daily compared with a daily average of 30,840 cases during the previous week. 

To date, 2.74 million Americans have tested positive for Covid-19 and 130,000 have died from the disease.

Last week, Florida reported its first increase in new jobless claims to the Department of Labor since the state pushed to reopen businesses in June. A recent rise in Covid-19 cases led to renewed closures across the Sunshine State. On average, Florida reported 7,131 new cases of Covid-19 daily over the last week, compared with a daily average of 3,762 over the previous week. 

At 23%, Puerto Rico reported the highest unemployment rate last week, followed by Nevada and Hawaii, both above 20%. Oklahoma, Kentucky and Oregon reported the largest decreases in people applying for jobless benefits. 

Paul Hlad has owned Alliance Awards in Greeley, Colorado, since 1988. (Courthouse News photo/Amanda Pampuro)

The pandemic’s economic side effects have spared few industries, including the trophy business. 

“This is much worse than 2008 was,” said Paul Hlad who has owned the trophy shop Award Alliance in Greeley, Colorado, since 1988. “There is no comparison to the economic significance of that economic downturn and this one.” 

Between layoffs and canceled sports seasons, commissions for Award Alliance in Greeley, Colorado, dropped 75% over the last four months. Hlad is getting by on engraving name tags for the local police department. Still, he pointed to a shelf by the door where a newly engraved fantasy football league trophy awaits pickup beside crystal to commemorate a worker’s 25th year on the job.

“We enjoy the business because we make a permanent record of the extremely outstanding accomplishment that people do,” said Hlad, an elderly Christian with a sharp memory for people’s names and feats. He believes that promoting and honoring hard work will pull his business and others through the Covid-19 crisis.  

“The pandemic just means we have to reevaluate and regroup,” Hlad said. “Around here we say, ‘aim for perfection, demand excellence,’ so everything we do we always do our very best and try our very hardest.”

%d bloggers like this: