Unemployment claims send another worrying note

Despite some signs of economic revival, the outlook for American workers remains treacherous, with layoffs continuing to claim hundreds of thousands of jobs a week.

Weekly data on the Labor Department’s unemployment claims on Thursday showed no relief, said Barclays chief US economist Michael Gappen, “was a transition to a slower pace of recovery, and one that would be more uneven.”

The department reported that more than 857,000 workers filed new claims for state unemployment insurance last week, a slight increase before seasonal adjustments. On a seasonally adjusted basis, the total unchanged from the revised figure for the previous week was 884,000.

In addition, about 839,000 new claims were tallied under a federal program called Epidemic Unemployment Assistance, which provides assistance to freelancers, part-time workers, and others who do not typically qualify for state benefits. This figure, which is not seasonally adjusted, was 748,000 last week.

“It’s a very strong punch to see these numbers every Thursday without any improvement,” said Diane Swonk, chief economist at accounting firm Grant Thornton in Chicago. “The number is going in the wrong direction.”

Although weekly unemployment insurance filings are below the peak of more than 6.5 million in the early spring, they remain disappointingly high. Prior to the epidemic, new weekly claims were typically over 200,000. Many economists expected that they would fall more now.

There are some signs of hope. The unemployment rate fell to 8.4 percent in August. Many states are moving forward with the reopening of businesses. Home sales are strong.

A wild card is the Congress deadlock over another coronovirus relief package. House Democrats have passed a $ 3 trillion bill that would reinstate the $ 600 weekly unemployment benefit supplement that ended in July. A much smaller Republican package that revives the $ 300-per-week supplement failed to advance to the Senate vote on Thursday.

President Trump ordered a $ 300-per-week replacement through the Federal Emergency Management Agency last month to halt the replacement, but it has been slow to get off the ground and has only funds for a few weeks.

Eighteen states have started paying, said Michelle Evermore, senior researcher and policy analyst for the National Employment Law Project. “It would have been much easier and faster if the Congress had done any expansion,” he said.

At the same time, the epidemic unemployment assistance program is attracting millions of recipients – and there are allegations that some people are abusing it.

A California official said the state suspected the recent increase in claims under the program was a result of fraud, and was investigating “unscrupulous attacks” that have exploited identity theft and other vulnerabilities in the system .

The program, created as part of epidemic relief efforts enacted in March, is intended to help gig workers, part-time, independent contractors and self-employed. The Labor Department said that in the week ending August 22, 14.6 million people were collecting benefits under the program, and about half were in California.

A spokeswoman for California’s Department of Employment Development, Lore Levy, said the state was “aggressively fighting” at the program. “We suspect that a large part of the unusual recent increase in PUA claims is linked to fraud,” she said.

Ms. Levy said the state is suspending or closing dubious claims and is working with local and federal authorities to expose and prosecute offenders.

“Criminals are often using stolen identity information from national and global data breaches, as well as accelerating payment efforts,” she said.

In August, 21 current and former inmates of California’s main San Mateo County Jail were charged with fraud after applying for benefits under the program while in custody. The fake claims yielded more than $ 250,000 in payments.

Whatever the problems with fraud, the program provides a lifeline to many individual workers with legitimate claims.

Pedro Knight, a DJ from the Washington area, saw his livelihood fade as events and other celebrations were halted. “By April, it hit me, and I realized that we were definitely in this for the long haul,” he said.

He applied for epidemic unemployment assistance, and in June he began receiving $ 350 a week in benefits after taxes, in addition to a $ 600 federal supplement.

Although the supplement expired at the end of July, the original payment has continued, giving him enough for his share of the $ 750 monthly rent for an apartment in Rockville, MD, to pay his $ 400 car and His $ 120 car insurance bill.

As the Congress argues for supplementary aid to the unemployed, some find themselves struggling without it.

Robert Rooney was displaced as an engineer at the Bellagio Hotel in Las Vegas on March 15, and then permanently shut down on August 31. After a $ 600 supplement, Mr. Rooney was left with $ 423 a week in Nevada unemployment benefits after taxes.

Mr. Rooney’s wife, Jennifer, is still working, but believes he will be unable to pay the $ 1200 rent for his two-bedroom house by the end of the year. They are considering selling one of their cars and have left to buy a home, something they expect this fall.

They are using credit cards to pay for groceries, gas, and about $ 300 per month in medical costs for Mr. Rooney’s mother, who has lung disease. They are dipping into their small pot of savings for minimum payments on their credit card bills.

Ms. Rooney worked on an entry-level job and last year got the opportunity to do data entry at a local non-profit organization. Her wages are $ 12 per hour, which she made 10 years ago, before earning her bachelor’s degree. She was expected to work her way up as she changed industries from her former work in healthcare. But his salary is too low to save the family.

Both, 41 years old, both have fertility challenges, and before the epidemic, they were seeking fertility treatment or adoption. Now, without Mr. Rooney’s job and his company’s health insurance running at the end of the month, they cannot prospect either.

“It’s really painful to think about what might happen,” said Mr. Rooney. “The epidemic has eluded all.”

Rooney plans to move to Texas by November to take advantage of lower housing costs and in the hope that he will get the privilege of working there.

Joe Braxton is equally devastated by the disappearance of the $ 600 per week supplemental benefit.

For 10 years, Mr. Braxton helped market himself at events like Southwest and South by Comic-Con. While events around the country were canceled due to the epidemic, Mr. Braxton found himself out of work.

Thanks to a job at the beginning of the year at an auto show, he qualified for unemployment benefits, including a $ 600 federal supplement. This allowed him to pay $ 1200 in rent for his one-bedroom apartment in Bladensburg, Md.

When the supplement expired, he was left with $ 100 per week in state benefits. His landlord allowed him to pay less than the full rent each month until he found work.

But Mr. Braxton, 40, has not been able to pay for his car loan or auto insurance – which is a total of $ 860 a month – and owes him $ 2,700. Now he waits for his car to recover.

“Everyday I get up and like, did they come to pick it up?” Mr. Braxton said. “I feel like I’m being punished by the epidemic, and it’s not even my fault.”

Some are more fortunate. 28-year-old Pamela Alvarez was a librarian in Chicago until an epidemic occurred. She was knocked unconscious on 1 May, and then permanently closed on 1 July. Her husband continued to work, but her overtime shifts were cut, and when she lost a $ 600 unemployment supplement, it was difficult for her to pay her $ 1,600 monthly rent. payment.

Last week, Ms. Alvarez was offered a one-year position with a non-profit organization that helps low-income people repair and replace their furnaces. He accepted, even though he was relieved to do the job when he paid $ 16 an hour compared to $ 23.

“I still can’t believe that I got the job after applying for more than 50 positions,” she said. “It seems like a dream, and a bad dream at the same time, because now I have to work outside the house during an epidemic and I fear getting sick.”