Jobless claims stack up in crisis
California’s gig workers likely to file en masse next
An additional 4.4 million Americans filed for unemployment last week, continuing a spike in joblessness coinciding with what some economists are calling the worst global recession since the Great Depression.
The numbers capture the visceral pain workers across the Bay Area are feeling. As businesses and governments moved in February and March to limit travel and gatherings, workers in the events and hospitality businesses were among the first to lose their livelihoods and seek unemployment benefits. More layoffs followed in retail after shelterinplace orders shuttered stores. Even tech was not untouched, with layoffs at public companies and startups that had just raised money from investors.
The one upside, economists said, is that the worst may already be behind us.
“It’s really mindboggling for economists to see numbers of this magnitude,” said Scott Anderson, Bank of the West’s chief economist.
“We have a few more weeks here of eyepopping claims numbers,” Anderson added, saying he expected filings to taper off in the coming weeks.
The new data reported by the Department of Labor on Thursday represented a drop of 810,000 from the number of claims filed in the prior week. Since job losses began their sharp
spike upward in midMarch, 26 million Americans have sought unemployment benefits.
Job losses eased in California, with the state receiving 533,568 unemployment claims in the week that ended April 18 — a more than elevenfold increase over the 44,729 claims filed in a similar period a year ago. It was the third straight week of a decline in new claims, after more than 1 million Californians filed for unemployment in the last week of March.
California’s Employment Development Department, which manages the state’s unemployment insurance program, said it had paid $3 billion for 3.2 million claims over the past six weeks, with $2 billion of that coming in the last week alone. Some of that sum included funding from the $2 trillion Cares Act relief package, which boosted unemployment payments by $600 a week.
Around 60,000 San Franciscans had filed for unemployment insurance as of April 4, with another 40,000 filing expected to be recorded for the following weeks, Mayor London Breed said Wednesday. That translates to about 1 in 6 working San Franciscans being out of a job, based on census figures.
Roughly 45,000 people in San Francisco applied for unemployment during the 200709 recession, she said.
The U.S. unemployment rate is likely close to 20%, Anderson said. He noted that a second wave of the virus that comes during the fall and winter, as the director of the Centers for Disease Control and Prevention recently warned could happen, could drive that number up even further.
“Until we get a real vaccine produced at a global scale I think we will continue to see the drag on the economy and jobs, and the unemployment rates will stay elevated,” Anderson said.
Once businesses do start operating again, some workers may be able to snap back into their old positions, but others might not, said Dean Baker, senior economist at the Center for Economic and Policy Research in Washington.
But those out of work are facing intense financial insecurity in the meantime.
Joanne Liu lost her job as a housekeeper at the St. Regis San Francisco hotel in midMarch and has been struggling to keep up with bills and take care of her family.
“This is the first time I feel danger for myself and my family,” she said, fighting back tears. Her husband’s $17anhour job as a delivery driver for a laundry service has also dried up. With one daughter moving home and another with special needs, her unemployment check is not enough.
“I paid for rent, and now I have $300 left” from a recent unemployment payment, Liu said.
She pointed out that some hotels received financial help under the Cares Act.
“They need to take care of their workers,” Liu said.
A hotel lobbying group has asked Congress for permission to spend stimulus rescue loan money meant to help keep workers on payroll on rent and debt payments instead.
Another provision of the relief law will allow the selfemployed, who would not normally be eligible for unemployment benefits, to receive payments. The number of claims could swell again as states let that group file for benefits.
Separately, California has encouraged some technically selfemployed people, like ridehail drivers, to file for regular benefits. AB5, a law that took effect in the state in January, makes it harder for companies to claim some workers are not employees. If those workers file claims for benefits, the state may find that they should have been treated as employees and thus eligible for regular unemployment.
For some gig workers, like Alameda driver Edan Alva, help replacing lost wages can’t come soon enough.
Alva normally drives for Lyft and other ridehail services 20 to 30 hours a week. That has dried up as people stay home.
“My earnings go to the point where it was $5 an hour,” Alva said. He said he filed for unemployment but has yet to receive any money from the state to compensate for his lost driving wages. State officials have said they are hastening to get payments out.
Lyft, Uber and DoorDash have said they will challenge AB5 with a ballot initiative this fall, committing millions of dollars to the effort.
For those whose selfemployed status isn’t in doubt, the EDD will start taking applications on Tuesday for benefits under a new federal program, Pandemic Unemployment Assistance.
Alva said he counts himself lucky that friends and family have pitched in to help him with his bills. “If it weren’t for that, I would be really struggling,” he said.
Even as rides dissipate, the need for other ondemand jobs like grocery or meal delivery has been rising. But some ridehail drivers are wary of shifting to other gigs, said Chris Brenner, a professor at UC Santa Cruz who studies the industry.
“Some people prefer ridehailing and don’t like food delivery because it’s more complicated,” he said. Delivery couriers face parking tickets and other costs. Brenner said many ridehail drivers who responded to a recent survey he conducted said they are not working at all.
Job losses have even hit the highflying tech industry. This week, San Francisco online loan provider Lending Club cut 460 of its jobs, about 30% of its workforce. Palo Alto’s Houzz laid off 155 people, or 10% of its total staff. San Francisco’s Patreon, which collects monthly subscriptions for creative types, laid off 30 employees, accounting for 13% of its staff. Yelp and Eventbrite of San Francisco and Oakland’s VSCO, a photo app maker conducted layoffs this month.
Even Google, which had struggled to find enough office space in the Bay Area to house its growing workforce, is feeling a pinch: CNBC reported Thursday that the Mountain View company was slashing its marketing budget and freezing hiring for marketing roles. San Francisco Chronicle staff writer Roland Li contributed to this report.