US Unemployment Hovers Near 15% as Phoenix-Sized Population Seeks Benefits

The normally bustling 8th Street Plaza in Greeley, Colorado, is pictured here on Monday, hoping to attract customers back as lockdown orders related to the coronavirus ease nationwide. (Courthouse News photo/Amanda Pampuro)

(CN) — Nearly 2 million Americans reported that they were newly out of a job last week, with about 14.8% of the country still collecting unemployment insurance benefits, the Department of Labor reported Thursday.

“The Covid-19 virus continues to impact the number of initial claims and insured unemployment,” the report explains.

Counting a total of 29.9 million Americans receiving unemployment benefits, the federal agency says 10 million of this group are claiming Pandemic Unemployment Assistance benefits and 209,692 are claiming Pandemic Emergency Unemployment Compensation benefits. These programs extend benefits to gig workers and the self-employed who are typically ineligible to claim unemployment insurance benefits.

With the addition of 1.8 million by May 30, a total of 42.6 million Americans have applied for benefits over the last 12 weeks, about 14% of the country’s total population.

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.

Nevada reported the highest insured unemployment rate in the country last week — nearly 25% of its workforce is collecting benefits — followed by Maine, Michigan, Puerto Rico and Hawaii, all above 20%.

Maine also reported the highest increase with 11,941 new claims, while Washington, Florida and California all reported decreases in initial claims.

“Optimism is contagious,” declares a sign on a civil engineering firm in Greeley, Colorado, that has chosen to continue to work from home as lockdown orders related to the coronavirus ease nationwide.(Courthouse News photo/Amanda Pampuro)

More businesses are reopening as states relax public health orders, leaving communities to develop a new sense of normalcy between promoting economic productivity and controlling the spread of Covid-19 — a disease that has claimed the lives of nearly 110,000 Americans over four months.

“Nobody knows when we are going to literally go back to where we used to be, but my sense is that it’s going to take a few more years,” said David Kim, an investigator at the Center for the Evaluation of Value and Risk in Health at Tufts Medical Center in Boston.

While markets are driven by consumers, Kim pointed out that Covid-19 altered what consumers need and want. With the cancellation of academic conferences, for example, Kim said a lot of people realized they don’t need to spend money traveling to seminars that are accessible remotely.  

“All that money, the time,” remarked Kim, “is it really worth it?” 

With some businesses reopening at reduced capacity and others automating or consolidating jobs, many companies don’t need the same number workers back. In May, New York Federal Reserve economist Joseph Briggs projected 75% of jobs lost in the pandemic will return by the year’s end. Given today’s reported unemployment, that would leave more than 6 million people out of work during Christmas. 

“On the surface, we all understand If we shut down businesses it will increase unemployment,” explained John Gibson, associate professor in the Department of Economics and Finance University of Texas at El Paso. “But there’s also kind of a latent issue at hand, which is that we’re dealing with a dangerous and extremely communicable disease that’s spreading through the country.” 

Comparing joblessness in states with lockdown orders against those without, Gibson reported last month that, while unemployment rates were about 30% higher in states with lockdown orders, not having stay-at-home orders didn’t necessarily preserve local economies. Besides stay-at-home policies, Gibson points to “the spread of the virus and a general waning of consumer confidence,” as factors driving the unemployment spike.

“In some sense, I remain kind of pessimistic about the speed with which unemployment will come back down as we start to reopen again,” Gibson said. “Because even once we remove these stay-at-home measures, people are also going to be more guarded about how much exposure they’re willing to take.”

Still, some customers are testing the waters. 

“I feel like it’s everyone’s choice,” said Sara Kimmel, of Greeley, Colorado, on her way to share margaritas with a friend on a sunny June afternoon. “If you want to make the risk to go out, then go out. If you feel like you’re higher risk, and want to stay home, then you should.” 

An oil town with a population of 107,000 people, Greeley lies an hour north of Denver. With 2,406 confirmed cases of Covid-19 and 125 deaths, the surrounding area of Weld County has the fourth highest infection rate in the state, and the highest outside of the Denver metro.

Although unemployment claims are declining in Colorado, 517,414 people have filed for benefits since March with the state paying out $703 million in benefits. 

Alex Acosta outside Doug’s Diner in Greeley, Colorado, on Monday, June 1, as lockdown orders related to the coronavirus ease nationwide. (Courthouse News photo/Amanda Pampuro)

Recent data published by the state expands on localized Covid-19 outbreaks from nursing homes and health care centers to restaurants and grocery stores. But some workers are focusing on the benefits of being at work rather than the risks.

“It feels good just to see your regulars come in,” said Alex Acosta, head chef at Doug’s Diner in Greeley. Although he was furloughed for two weeks in March, Acosta quickly returned to cook to-go orders — mainly pancakes and French toast.

“A lot of sweet eaters were ordering comfort food to go,” Acosta said, sitting outside the restaurant after it reopened its dining room on June 1.

“I’ve been here three years, so it’s sad to see it a ghost town,” Acosta said, looking across the unusually vacant plaza frequented by day-trippers and families when the summer weather sets in. “But we can look forward to next year. We have more time ahead of us.” 

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