Nearly 3 years in benefits paid out in a week: Despite signs of recovery, jobless claims remain high

Georgia’s Department of Labor said Thursday it processed 105,160 new jobless claims last week, a sign that the persistence of the coronavirus may be undercutting the economy’s rebound.

Last week’s filings were 12,000 fewer than the previous week but continued a string of historically elevated claims that began in mid-March. The state has now seen 15 consecutive weeks at levels far higher than the worst of the Great Recession, last week paying out more than $148 million in weekly state benefits.

“No one would have imagined in the same year we experienced our lowest monthly number of claims since 1975 that we would pay almost three years’ worth of benefits in one week,” said Commissioner of Labor

Mark Butler.

More than 600,000 Georgians are now receiving unemployment benefits, about one in every eight people currently in the labor force. That does not include people who have chosen not to file or have been discouraged from completing applications by an online, sometimes frustrating process.

Nationally, about 1.3 million workers filed new claims for unemployment benefits last week, down 99,000 from the previous week, according to the U.S. Department of Labor.

Since mid-March, Georgia’s Department of Labor has processed nearly 3 million initial claims – including many duplicates and even some fraud – but roughly one-third of those claims have been approved.

The department has gotten payments to the vast majority of those who are eligible, according to Butler. But the enormous surge of claims means thousands of people have waited a month or more. Many are still waiting.

William Jackson of Dacula was laid off from a white-collar job in mid-May. His wife, too, lost her job because of the pandemic.

He filed for unemployment, but then was locked out of the system, informed by the website that his Social Security number and mother’s birth name were entered incorrectly.

“I am about to turn 58 years old so I am quite sure I know both my Social Security number and my mother’s maiden name,” he said.

He tried to get a labor department staffer’s help.

“I try daily to access the system,” Jackson said. “I leave messages every Monday, Wednesday and Friday. You can never get through. You either get a circuit busy, or a busy signal and never pass that point no matter the time or day that you call.”

In the first effort to slow the spread of the coronavirus, the shuttering of businesses, along with a shelter-in-place order, triggered massive job cuts. The lifting of most restrictions on business and residents in May seemed, at least at first, to spark a burst of rehiring as furloughed workers went back to their jobs.

But the flood of jobless claims has not abated, stoking fears that the direct damage of the closings in March has cascaded through the economy to damage other sectors. A resurgence in the number of COVID-19 cases in Georgia and across much of the U.S. in recent weeks is also threatening to derail the recovery.

The number of weekly claims has been slowly decreasing. Yet the share of claims that are furloughs – that is, intended to be temporary – has been shrinking. That could mean people laid off now are less likely to be rehired where they used to work.

A survey of several thousand members of 9to5, which represents mainly female office workers, showed more than 60% had suffered furloughs, layoffs or reduced hours, said Leng Leng Chancey, executive director of the Atlanta-based group.

Talk of recovery is unconvincing, as members struggle to pay rent and utility bills, she said.

“We have not seen the worst of it yet,” she said. “We have not hit bottom.”

In the past few weeks, Georgia Pacific laid off about 130 employees, part of what company officials said was a restructuring in the consumer products group at the company’s headquarters in Atlanta, where 2,600 people work.

Among other cuts in Atlanta, according to the Department of Labor: Freeman Expositions is cutting 47 jobs, the Carestream Dental Partnership is reducing staff by 29 positions, Spire Hospitality is laying off 71 people and Levy Premium Foodservice is slashing 371 positions.

In Forest Park, Jacobson Warehouse Company is eliminating 175 jobs.

A recovery likely began in May, but the pace of improvement has slowed, said Abbey Omodunbi, the regional economist for Georgia at PNC Financial Services Group. “Job growth going forward will likely be weaker.”

Moreover, the increase in coronavirus cases is a significant threat to that recovery, he said. “The strength of the recovery is highly dependent on the progression of the pandemic and the public response.”