Jobless claims increase again in California, U.S.

Unemployment claims in California shot to their highest level in three months, topping 145,000 filings last week, the government reported Thursday.

California workers filed 145,400 initial claims for unemployment during the week that ended April 3, an increase of 39,000 from 106,400 claims filed the prior week, the U.S. Labor Department said.

Nationwide, jobless claims totaled 744,000 during the week ending April 3, up 16,000 from the week before.

California now accounts for 19.6% — about one 1 of every 5 — of the jobless claims being filed in the United States, Labor Department data shows.

The current weekly claims totals in California are the highest they’ve been since the week ending Jan. 9, when workers filed 182,600 initial jobless claims.

The number of Americans applying for unemployment benefits signals many employers are still cutting jobs even as more people are vaccinated against COVID-19, consumers gain confidence and the government distributes aid throughout the economy.

Jobless claims have declined sharply since the virus slammed into the economy in March of last year. But they remain stubbornly high by historical standards: Before the pandemic erupted, weekly applications typically remained below 220,000 a week.

For the week ending March 27, more than 3.7 million people were receiving traditional state unemployment benefits, the government said. If you include supplemental federal programs that were established last year to help the unemployed endure the health crisis, a total of 18.2 million are receiving some form of jobless aid the week of March 20.

More stimulus en route

President Joe Biden’s administration said Wednesday 25 million more stimulus payments worth a total of $36 billion had been sent out to Americans from the $1.9 trillion pandemic relief legislation.

The announcement of a fourth batch of checks was made by the Treasury Department and the IRS.

It brings to 156 million payments the amount disbursed, with a total value of $372 billion.

The latest payments of up to $1,400 began processing April 2, with some people receiving direct deposits, Treasury said in a statement.

Yellen wants global tax minimum

U.S. Treasury Secretary Janet Yellen on Monday urged the adoption of a minimum global corporate income tax, an effort to offset any disadvantages that might arise from the Biden administration’s proposed increase in the U.S. corporate tax rate.

Citing a “30-year race to the bottom” in which countries have slashed corporate tax rates in an effort to attract multinational businesses, Yellen said the Biden administration would work with other advanced economies in the Group of 20 to set a minimum.

“Competitiveness is about more than how U.S.-headquartered companies fare against other companies in global merger and acquisition bids,” Yellen said in a virtual speech to the Chicago Council on Global Affairs. “It is about making sure that governments have stable tax systems that raise sufficient revenue to invest in essential public goods.”

The speech was Yellen’s highest-profile so far on international affairs and came just as the spring meetings of the World Bank and International Monetary Fund began in a virtual format.

“It is important to work with other countries to end the pressures of tax competition and corporate tax base erosion,” Yellen said.

Biden has proposed hiking the U.S. corporate tax rate to 28% from 21%, partially undoing President Donald Trump’s administration’s cut from 35% in its 2017 tax legislation. Biden also wants to set a minimum U.S. tax on overseas corporate income, and to make it harder for companies to shift earnings offshore. The increase would help pay for the White House’s ambitious $2.3 trillion infrastructure proposal.

Will landlords agree to waive 20% of what their tenants owe them?

AIt’s an 80-20 partnership between us and the landlords.

That starts to look and feel a lot more like what a lot of landlords would have typically expected (to lose) if they had some vacancy or turnover in a year. And so those volumes start to be more in line with what a landlord, a property manager would be cash flowing at any particular time.

QHow challenging was it for the state to create this program from scratch?

ARental assistance is not something new. But trying to launch a statewide program in an emergency environment to address the need, that was the new part.

We had to stand this up in record time and go from no such program existing previously to the largest program in the history of the country. We did that in less than five weeks.

We know that other states have been doing this or were trying to do it, just like we were. So we coordinated and partnered with them. We tried to take the best information, making sure that we were accounting for how to keep the barriers low to come in and seek assistance, but also to make sure that all the security and the fraud protections and (preventing) the duplication of benefits were there.

QWill the $2.2 billion from the American Rescue Plan feed into this?

AThere will likely be some legislation because it’s a very large allocation, and the Legislature and the governor will weigh in on it. But I would imagine that they’re going to feed it into our current program.

QWhat kind of response have you gotten through the application portal?

AWe have more than 120,000 active applications (as of Wednesday), 43,000 of which are fully complete, and it’s about $367 million worth of assistance being sought. And that’s just over two weeks.

QWhat proportion of these applications are by landlords and how many are by tenants?

AWe’re looking at roughly 40% coming through landlords, and 60% are coming though tenants. Folks are eager for assistance.

QSome tenants won’t be able to get their landlords to participate and will only get 25% of their rent. Though that protects them from eviction through June, what happens if they can’t pay the rent in July, August or September?

AWith the American Rescue Plan and the next allocation — I think some of that is what the governor and the Legislature are going to weigh in on. So the eviction moratorium and some of that language will most likely be addressed with this next tranche of funds.

Second, if I’m a landlord, maybe I was holding out, trying to understand what was maybe going to be available, what wasn’t going to be available. We now know what’s going to be available. And you’ve got a chance to get cash in your hand now.

So if you’ve been struggling for a year, this is your chance to get paid. So there should be no hesitation.

QWhat happens to those with incomes of 80% and above their area median income?

AThe rental assistance program as it stands today cannot serve folks 81% AMI and higher.

We are trying to make sure we take care of the most vulnerable, but we understand, folks in general who are behind on their payments are vulnerable.

It is not a perfect solution. … But in this moment, that’s how we have to operate.