A flood of jobless claims in Colorado
A flood wall of rising unemployment unlike anything the state has ever seen is now sweeping its way through the economy.
The Colorado Department of Labor and Employment has processed 61,000 initial applications for unemployment benefits so far this week after working out capacity problems, a big surge from the 26,000 it was able to handle last week.
Assuming that the pace held into Friday, the state would be on track to accept about 75,000 claims this week, or nearly triple the initial requests for benefits seen last week, which was already a record setter. As a point of reference, in February there were a total of 81,700 Coloradans unemployed.
Because of the surge, the state’s
online system had difficulty last week processing all the claims.
“The system is experiencing more stability. It can handle 15,000 to 20,000 applications a day,” Cher Haavind, a spokeswoman for the CDLE, said during a conference call Friday morning.
Just because a claim is submitted doesn’t mean it is automatically accepted.
State employees must verify someone is actually eligible to receive benefits, worked where they said they did and made the level of pay they are claiming. That can take time, but the state is moving faster on that front as well.
Colorado officially reported 19,745 new unemployment claims to the U.S. Department of labor for the week of March 1421. That’s 8.5 times the 2,321 reported the week prior. The highest weekly count of initial claims during the Great Recession occurred during the week of Jan. 9, 2010, at 7,749. Colorado is on track to see nine to 10 times the weekly claims seen at the worst point of the last downturn.
Another big wave of claims is expected after the passage and signing of the stimulus measure Friday.
One provision would allow independent contractors, gig workers and sole proprietors, who didn’t pay into unemployment insurance trust funds and weren’t covered in the past, to receive unemployment benefits if they lost income because of the pandemic.
The newly eligible, however, should hold off on applying for benefits until they get a go-ahead, which might occur at some point in April. The system is under severe strain, and it won’t help if it is hit with a new wave.
“We are right now asking anyone included in those expanded categories to not file a claim yet. They wouldn’t be eligible. We won’t have the systems reprogrammed,” Haavind urged.
The department’s call center still has significant hold times. Haavind said those seeking benefits should apply online, if possible, and should access online resources that explain how benefits work and how to apply. But she also acknowledges that “human interaction provides a layer of comfort” for people who have suddenly found themselves in a predicament they never expected. They will just have to be patient.
The Colorado Employment Situation report for February shows the state entered the downturn with some momentum and a historically low unemployment rate of 2.5%, which has been in place since October. Colorado was tied with South Carolina and Utah for the third-lowest unemployment rate in the nation in February, said state labor economist Ryan Gedney, who also was on the call. The U.S. unemployment rate was 3.5% in February.
In the calm before the storm, employers in the state added 3,100 nonfarm jobs last month on a seasonally adjusted basis compared with January and most sectors added jobs on a monthly basis last month except for construction, natural resources, retail and transportation, education and health care, and information. Employers in the state added 50,100 nonfarm jobs in the past year, which represents a growth rate of 1.8%.
Gedney said the sectors taking the hardest hit are leisure and hospitality and retail, along with personal service providers. Air transportation, car rentals, tour operators and travel agencies have been dealt a devastating blow, as have dine-in restaurants and nonessential retailers. Oil prices have collapsed, and the petroleum industry, an important one, already was shedding jobs before the downturn.
How bad things get will depend on how long closures and restrictions on movement last, Gedney said, adding that it is too early to make a forecast on how high unemployment could go. There is also a hope that the lifelines the federal government is throwing out in a $2 trillion stimulus package will encourage more businesses to hold on to their workers rather than let them be swept away.
The state probably won’t get a good grip on how much the unemployment rate shot up because of the coronavirus crisis until the middle of May. The March employment report coming out April 17 covers employers reporting a payroll only through the week of March 12. The weekly claims for unemployment benefits, however, indicate that April’s report will be unprecedentedly bad.