Virus Has 15.5% of US Getting Unemployment Checks

Larimer Lounge remains closed during the Covid-19 pandemic in Denver’s RINO neighborhood, short for River North Art District. (Courthouse News photo/Amanda Pampuro)

(CN) — The worst projections of the economic crisis caused by the Covid-19 have been realized, according to the Department of Labor’s weekly unemployment report. The 22.6 million Americans receiving unemployment insurance benefits represent 15.5% of the country’s workforce. 

With a total of 33.2 million people applying for benefits since March, the country has seen an average of 4.1 million applying each week over the last four weeks.

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.

The report now includes nearly 1 million claims for Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation, programs created by the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, that extend timelines and increase benefit amounts.

With a quarter of its workforce receiving benefits, Vermont has the highest rate of insured unemployment in the country, followed by West Virginia, Michigan and Rhode Island, all above 20%.

Washington state experienced the highest rise in claims — there were 56,030 new claims there last week — followed by Georgia and New York. California, Florida and Connecticut all reported decreases in claims for benefits.

The Congressional Budget Office’s April analysis projects a total of 27 million jobs lost though the third quarter. 

“The labor market is expected to improve after the third quarter, with a rebound in hiring and a significant reduction in furloughs as the degree of social distancing diminishes — leading to an increase in business activity and an increase in the demand for workers,” Congressional Budget Office director Phillip Swagel explained in the report.

Economic turmoil could last through the next year and a half, the report predicts. It also expects unemployment, which was less than 4% in January, to spike at 16% over the summer and decline toward 9.5% by the end of 2021. 

“The shakeup has been massive on both sides of the market,” said Jeffrey Clemens, an associate professor of economics at the University of California San Diego.

Although it’s difficult predict what economic recovery would look like, Clemons said to expect “large numbers of firms that need to fill a variety of jobs.” 

“The retail sector or the restaurant sector, or hotels, or large event-hosting venues — those industries are going to be permanently depressed for at least a number of years,” Clemons added. “So if you were in those spaces before, as either a worker or a firm owner, everything that you see in front of you is going to look worse than it did before.”

Bastien’s Restaurant on East Colfax Avenue in Denver closed during the Covid-19 pandemic and may not be able to reopen anytime soon. (Courthouse News photo/Amanda Pampuro)

Pew Research Center estimated a month ago that 90% of the first 2.9 million jobs lost in the pandemic were positions that could not be done remotely. While teachers and stock traders can telecommute with relative ease, servers and hair stylists were out of not just a job but an industry. 

As most states loosen stay-at-home orders now to let more businesses reopen, many Americans worry that they are being forced to chose between their health and the economy. The issues remain intertwined. 

At the same time millions of Americans applied for unemployment benefits in droves in mid-March, an increasing number of people had become concerned about contracting the coronavirus, according to polls aggregated by FiveThirtyEight. As of May 7, 68% of Americans reported being are worried about getting sick, while 84% of Americans worry about the economic impacts of the virus. 

Many economists say the country must strike the right balance to keep consumers and workers healthy enough to be productive. To date the disease has infected 1.26 million Americans and killed at least 74,581 here. 

“I think this is a slippery slope,” said Matthew Osterman, founder of Sleeping Giant Brewing Company in Denver, Colorado. “It’s really tough for us because we’re in a situation where we really need bars and restaurants to be open, but at the same time it would be hard for me to advocate for that because I’m not comfortable going to a bar or restaurant tomorrow.” 

Osterman said the brewery faced a staffing shortage in March as he encouraged employees to call out of work with any symptoms of illness. The team of 27 is back in the manufacturing facility now, but bars and restaurants are closed, slowing down orders for the contract brewery that produces products exclusively for others. 

Kept afloat by a Paycheck Protection Program loan, Osterman said instilling a communal mindfulness in the team has been important to keeping workers healthy. 

“Normally, as a business owner, I am very careful about not stepping over the line of telling our team how to handle their personal lives,” Osterman said. “In this particular case though, I decided that it would be appropriate to talk to the team and say, the decisions that you make outside of work are the decisions that are going to impact everybody else here.”

Osterman said the brewery has remained Covid-free and hopes to keep it that way.

Other businesses have not been as fortunate, including a Walmart in Aurora, Colorado, where the disease took the lives of an employee, her husband and a security guard. The Tri-County Health Department is managing Covid-19 response for Adams, Arapahoe, and Douglas counties closed the store.

“I think that was an appropriate action to do, and it’s since reopened,” Aurora Mayor Mike Coffman said. “I think we should move into the safe-at-home order. It’s not that much different from the stay-at-home, but it’s an incremental step in the direction of boosting things up.” 

While bars and restaurant dining rooms remain closed, Coffman encourages residents to order takeout once a week. 

“What I’m hoping is that it will encourage more activity in these restaurants where people realize it is safe to go pick up and carry out,” he said. “But I still worry that that there may be quite a few that may not reopen.” 

Despite the gradual reopening, the number of people getting impatient continues to grow. More than a hundred Coloradans gathered at the state capitol in Denver on May 1 in defiance of the stay-at-home orders. 

Holding a sign with the word “communism” crossed out, Monument, Colorado, resident John Attwood said, “We want to be able to go back to work.”

Protesters gathered outside of the Colorado State Capitol in Denver on May 1, largely in opposition of business closures due to the pandemic. (Courthouse News photo/Amanda Pampuro)
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