(CN) — Doling out benefits to some 18 million Americans, the Department of Labor announced Thursday that 12.4% of the U.S. were collecting insured unemployment as of last week.
“The Covid-19 virus continues to impact the number of initial claims and insured unemployment," the report confirms. “This marks the highest level of seasonally adjusted insured unemployment in the history of the seasonally adjusted series.”
Last week 3.8 million Americans filed initial claims for unemployment insurance benefits, the sixth week in a row where the rate exceeded 3 million claims. Week to week, this adds up to 30 million claims filed.
With 21.8% of workers out of a job, Michigan has the highest rate of insured unemployment in the country, followed by Connecticut and Pennsylvania.
Florida saw the largest increase in initial claims last week, followed by Connecticut and West Virginia. New York, New Mexico and South Dakota were among states that reported a decrease in layoffs.
Investment firm Goldman Sachs projects unemployment will reach 15% by the end of the third quarter with few opportunities for re-employment. Other economists are predicting unemployment will peak at 20%.
The Department of Labor used covered employment of 145,671,710 in its calculation, defining that term as Americans who are “unemployed through no fault of their own,” while also meeting certain work and wage requirements.
Since unemployment first started to spike at the end of March, only 60% of those who filed claims are currently receiving benefits, according to reports of continued claims.
For every 10 people who received unemployment insurance benefits, an Economic Policy Institute poll counted 6.4 people who could not get through, were rejected, or didn't apply because the process seemed too difficult. Based on its survey of 25,000 Americans, the D.C. thinktank estimates that the process shut out 7.8 million to 12.2 million people who would otherwise qualify.
The policy group also pointed to the U.S. unemployment insurance system as a place where improvements would prepare the country for future hardship. “Over time and with much investment, lots of this work could be done near-exclusively through an unemployment insurance system that is permanently enhanced and kicks on automatically at scale when a large crisis hits,” its researchers wrote Monday.
Other economists counter that if the economic impacts of Covid-19 are ephemeral, then the short-term solutions provided in the CARES Act, short for Coronavirus Aid Relief and Economic Security, are appropriate.
“Unemployment insurance is an effective income support tool when hard times are transitory, as we believe and hope would be the case for Covid-19,” said Domenico Ferraro, an assistant professor of economics at Arizona State University's W.P. Carey School of Business.
The challenge now is in finding the right balance between the risks of workers getting sick and losing income.
“A plan for gradually reopening needs to be designed,” Ferraro said. “In my view, this plan would need to open first states in which contagion has been more limited.”
If outbreaks in the disease continue to spike, however, “we need to learn how to live with it,” Ferraro added.
Public health officials reiterate the importance of managing the spread of the virus and scaling up testing.
“When we really have sufficiently widespread testing and we actually bring that testing to a random sample of the population, then we can know how many cases we actually have,” said Dr. Jon Samet, a pulmonary physician and epidemiologist who is dean of the Colorado School of Public Health at the University of Colorado Anschutz Medical Campus.
The university’s model projects physical-distancing needs in relation to Colorado’s hospital capacity. An April 20 report projects the state will hit peak infection of 19,800 cases in October if residents can limit social interactions by 65%. With social interactions only limited by 35%, coronavirus cases in Colorado could hit 151,000 by July.