‘ This brings stability’
New federal stimulus spurs hopes for Conn. jobs recovery
Many Connecticut public officials and economic experts are expressing confidence that Congress’ passage of the $900 billion coronavirus relief package will boost employment in the state, which has already seen a significant jobs comeback in recent months.
The new stimulus will infuse hundreds of millions of dollars into unemployment programs that have been a crucial lifeline. More than 35,000 state residents, the socalled gig economy workers, timed out of their unemployment benefits on Saturday and will now see their checks resume, perhaps without a gap.
Many more among the 181,000 state residents collecting benefits were facing cutoffs in the coming weeks.
Separately, the CARES Act 2 will bring more than $3 billion to small businesses, much of it for retaining workers.
“This brings stability, and the overall package brings some certainty to businesses,” said Chris DiPentima, CEO and president of the Connecticut Business and Industry Association. “We know money is coming from D.C. now. Business owners and leaders can now plan their businesses. This will hopefully get them to the light at the end of the tunnel.”
Much-needed funds
Connecticut’s direct share of the stimulus bill — which President Donald Trump signed Sunday after threatening a veto — will total more than $8 billion.
As part of that amount, the state is expected to receive about $695 million to extend unemployment benefits across several programs, Gov. Ned Lamont said.
All eligible people jobless benefits will receive an additional $300 a week for up to 11 weeks.
The roughly 35,000 self-employed people have not been eligible for regular, state-run benefits but they have been enrolled in the Pandemic Unemployment Assistance program, which expired Saturday. The stimulus extends that aid by 11 weeks, enabling recipients to collect up to 50 weeks of payments.
In addition, around 29,000 residents will benefit from an 11-week extension, to a total of 24 weeks, of Pandemic Emergency Unemployment Compensation. PEUC is an extended-benefits program for claimants who exhausted state unemployment insurance.
Among other jobs support offered by the relief package, it continues 100 percent federal funding for the state’s Shared Work program, which helps employers avoid layoffs by allowing them to use unemployment benefits to cover reduced hours.
The U.S. Department of Labor and other federal agencies are still writing rules for several of the programs but all of them are moving quickly, state officials said.
“Our state has been creative and diligent in ensuring our residents who need relief receive it,” Lamont said in a written statement Tuesday, “and we remain committed to getting these programs rolled out quickly.”
Billions for businesses
The new legislation also allocates $300 billion to support small businesses. Connecticut firms would likely receive more
than $3 billion from that allotment, which creates an updated version of the more than $500 billion in forgivable loans that to small and midsize businesses in the spring.
This time around, they must show at least a 25 percent loss of revenue in a recent three-month period.
“We will most certainly apply for it again, as this will enable us to keep our staff employed and minimize the financial damage to us as the employer,” said Anshu Vidyarthi, co-owner and principal of the Le Penguin and Le Fat Poodle restaurants in Greenwich.
Congress haggled and continued to haggle over details of this latest version of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, known as CARES Act 2. The extended unemployment was broadly embraced by both parties.
The first CARES Act, signed into law March 27, has played a key role in containing the pandemic’s economic damage in recent months after employment rolls were decimated in the spring.
Fueling the comeback
Connecticut shed an estimated 291,000 jobs as a result of COVID-related shutdowns in March and April, more than double the number of jobs lost in the state’s 2008-10 recession. The state then added jobs in each of the next six months, regaining about two-thirds of the positions lost in the spring.
“It’s not a coincidence that the rapid snapback was helped by the original CARES Act and the stimulus that provided to the economy,” said Patrick Flaherty, acting director of the state Department of Labor’s office of research. “We would anticipate the same thing would happen again. This will be a boost to the overall economy and help us to continue to recover.”
Last month, the state’s job rolls decreased by 1,600 according to the department’s monthly survey of employers, a slide that reflected the loss of about 1,000 federal-government jobs as temporary Census work ended.
The state’s official unemployment rate jumped about two full percentage points to 8.2 percent in November, compared with a national level of 6.7 percent. The state’s rate had declined in the previous three months.
Experts agree, however, that the official jobless rate — which is based on a household survey — significantly understates the actual unemployment level. To punctuate that point, the 181,000 state residents collecting unemployment represent 9.6 percent of the total labor force in Connecticut, and many more people are looking for work who don’t qualify for benefits.