Jobless claims rise again

Arizonans filed 28,522 initial claims for unemployment insurance last week, which was more than double the pre-pandemic weekly record of 11,178 applications set in July 2009. After a brief slowing in May, new claims for unemployment insurance have risen for two consecutive weeks.

The economic fallout from the coronavirus continues to chew its way through the state, spreading through a variety of industries beyond the service-sector that took the initial hit in the spring and sending tens of thousands of people to seek financial assistance.

Arizona jobless claims rose yet again last week far beyond record levels, and the Department of Economic Security is having technical problems this week paying people their weekly benefits.

It’s unclear how many people on unemployment are missing payments this week, and DES said it is working to correct the issues.

After a brief slowing in May, new claims for unemployment insurance have risen for two consecutive weeks. Meanwhile, a similar benefit Congress approved for people who are self employed or have “gig” jobs like driving for Uber has seen massive increases in applications.

Arizona saw 28,522 initial claims for unemployment insurance last week, which was more than 4,000 higher than the prior week and more than double the pre-pandemic record of 11,178 applications set the week of July 4, 2009, after the Great Recession.

Even that staggering figure pales in comparison to the 118,000 new applications for “pandemic unemployment assistance,” or PUA, for self-employed people and those who don’t normally qualify for regular unemployment insurance. Those applications rose from 96,000 the prior week and 59,000 the week before that.

There likely is significant duplication in the figures because people who apply for PUA benefits usually first apply for regular unemployment insurance and are rejected. Many people also apply more than once for benefits either out of frustration or because they fail to file weekly updates and then need to file a new initial application to restart their benefits.

Glitch delays payments this week

But even paying the people who previously applied remains a challenge for DES. The agency reported new problems with their systems that resulted in people who were scheduled to receive benefits this week not getting the money.

“We are aware that Unemployment Insurance payments scheduled for today have not reached the accounts of claimants,” the agency said on Twitter on Monday. “Our UI team is working to distribute these benefits to claimants as quickly as possible.”

Then the agency confirmed a similar problem with the PUA system showing benefits of $0 for people, and said it was investigating that issue.

Many people receiving unemployment benefits file their weekly claim as soon as possible on Sundays in anticipation of getting the funds deposited to their accounts on Monday.

The problem was not fixed for everyone Tuesday.

“While many payments have been issued to claimants, our teams are still investigating ongoing issues with claim payments and working diligently to resolve them,” DES spokesman Brett Bezio said Tuesday morning.

Some still waiting many weeks

Some people have been waiting weeks for benefits. Chuck Murray, 74, of Surprise, was working as a food delivery driver to supplement his Social Security payments when he lost work because of the pandemic.

He waited several weeks before eventually seeing a check from the pandemic unemployment program the week of May 12 when the program launched in Arizona. But he has not been able to collect any money since that initial payment of about $2,100, which was paid to about 165,000 people.

He continues to check his bank account each morning to see if he’s been paid the more than $4,000 he says he is owed. On Tuesday, still nothing was there.

“Still have not received my money except the original mail out,” he said, adding that he has spoken with seven people at DES to try and sort out his claim.

“I will lose my car on Thursday,” Murray said. “It’s been 21⁄2 months and they cannot figure it out.”

Benefits set to decline next month

Arizona’s sputtering economic engine has been running, in part, on $3.3 billion in unemployment assistance paid to hundreds of thousands of applicants so far this year, the vast majority of it since April.

Before the pandemic hit in late March, DES had about 18,000 people receiving continuing claims, with about 4,000 new claims a week and $3 million in weekly benefits paid.

Even if new claims for benefits hold steady, the weekly payout will decline next month when the additional $600 a week Congress provided for unemployment insurance and PUA recipients expires. Without an extension from Congress or an increase from Arizona lawmakers, Arizonans out of work will get a maximum of $240 a week after July 25.

While the number of new or initial claims for benefits have fluctuated in recent weeks, the total number of people who have successfully navigated the overwhelmed system and are receiving weekly benefits continues to increase.

Last week, DES reported a total of 234,000 people receiving unemployment insurance. The agency doesn’t break out a similar figure for PUA beneficiaries, but it has said that at least 165,000 people were predetermined months ago to qualify for that program.

Economy in ‘third or fourth inning’

Economist Elliott Pollack said the job losses now are occurring in a variety of sectors, not just the service industry and businesses that were hit early on in the pandemic.

“This thing is like the boll weevil, it has gone through the entire economy,” he said. “That is why the economy just had to open. The devastation — financial, economical, psychological — was getting pretty dramatic.”

Pollack said he expects 20-25% of the businesses that existed in February will not survive.

“The government doesn’t get it that these (small business) people living hand to mouth, check to check, they’re gone,” he said. “The most frustrating thing people don’t get is that we are probably in the third or fourth inning of this thing.”

He said that the rising number of confirmed COVID-19 cases is troubling, but it is promising that the number of deaths is not also spiking in Arizona.

“Now especially people under 45 seem to think the war is over. It’s not. They should still be social distancing and wearing masks,” Pollack said.

Despite the growing unemployment figures, there are rays of economic hope.

Pollack said job openings across the country are twice as high now as during the bottom of the last recession.

Prior to the pandemic, there were 7 million job openings in the U.S., the first time in history that figure exceeded unemployed people. That figure is now 5 million, he said.

“That is still a huge number by historic standards,” he said. “That suggests to me that when the economy starts to come back, until you hit supply chain constraints, it will come back pretty quickly.”