(CN) – A record 3.2 million Americans filed claims for unemployment benefits last week – nearly five times the previous benchmark set during the 1982 recession – as the Covid-19 pandemic wreaks havoc on the U.S. and global economies.
In its latest report, the U.S. Department of Labor points to one culprit as the main cause for the spike in unemployment: coronavirus, the microscopic vermin spreading throughout the nation and forcing companies to shift from offices to work-at-home-models or lay off nonessential workers.
“Nearly every state providing comments cited the Covid-19 virus impacts,” the report said. “States continued to cite services industries broadly, particularly accommodation and food services. Additional industries heavily cited for the increases included the health care and social assistance, arts, entertainment and recreation, transportation and warehousing, and manufacturing industries."
As of March 25, the U.S. Centers for Disease Control and Prevention reported 68,440 confirmed cases in the United States, with the death toll reaching the 1,000-person milestone.
At this time last week, the Labor Department sounded the first alarm at a 6% spike in new applications filed for unemployment benefits. In all 281,000 claims were filed.
The previous record for weekly unemployment claims was 695,000 in October 1982 – adding evidence to back up concerns that the Covid-19 closures will cause the greatest recession in history.
"I have been a labor economist for a very long time and have never seen anything like this," said Heidi Shierholz, director of policy for the Economic Policy Institute in a statement. The institute predicts that by summer, 14 million Americans will have lost their jobs and highlights the importance of the $2 trillion stimulus package passed Wednesday evening by the U.S. Senate.
"We just got the first piece of government labor market data that really shows – in a breathtaking manner – the impact the coronavirus shock is having on the labor market,” Shierholz added.
These applications also reflect a small deduction in claims from federal civilian employees and newly discharged veterans.
According to the Labor Department, the highest spikes in job losses occurred in California, Washington state and Nevada – all of which began March by celebrating record low unemployment rates below 4%.
Among the hardest hit sectors of the economy are the service industry, transportation, warehousing, and educational services, but few industries remain untouched.
To keep up with demand, Washington state’s Department of Economic Security announced last week it had hired 100 new staff members who would handle claims remotely, extended service hours to seven days a week, and moved in staff from other departments.
“During these unprecedented times many of our fellow Washingtonians are turning to unemployment insurance, many for the first time, to provide them the financial stability they need,” the department said in a statement. “This has created a tremendous spike in demand for this program. The spike in applications and phone calls we are receiving is unparalleled, and we are doing everything we can to address it.”
The California Economic Development Department is also directing people to other employer remedies such as insurance for workers in quarantine and paid family leave for those who are caring for ill family members.
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