84,387 more Virginians apply for jobless benefits

WASHINGTON — Another 84,387 out-of-work Virginians applied for unemployment benefits last week, among 4.4 million nationwide, as job cuts escalated across a crippled economy, the government said Thursday.

Roughly 26 million people have now filed for jobless aid in the five weeks since the coronavirus outbreak, including nearly half a million people across Virginia who have sought unemployment benefits since March 15. About 1 in 6 American workers have now lost their jobs since mid-March, by far the worst string of layoffs on record. Economists have forecast that the unemployment rate for April could go as high as 20%.

It was the second week in a row that the number had dropped week to week in Virginia. The state appears to have reached its peak in initial claims during the week ending April 4, when there were 147,369 claims. That dropped to 104,519 a week later and to 84,387 last week. Most states saw a decline last week after weeks of historically large jobless filings.

The enormous magnitude of job cuts has plunged the U.S. economy into the worst economic crisis since the Great Depression of the 1930s. Some economists say the nation’s output could shrink by twice the amount that it did during the Great Recession, which ended in 2009.

The numbers have grown despite the government’s Paycheck Protection Program that aimed to loan small businesses nearly $349 billion so long as they used 75% of the loan to rehire workers they had let go or keep them on the payroll. The businesses, though, have only recently begun receiving the funds — if they were lucky enough to be approved for a loan.

Renee Haltom, a vice president and regional executive with the Federal Reserve Bank of Richmond, said the business owners they’ve talked with “feel they’re competing with unemployment insurance, which for many workers in retail and food services is more generous than what they were making before.” Those now eligible for unemployment are receiving $600 a week in addition to what was available from the individual states. In Virginia, that’s $600 on top of a prior maximum of $378 per week. “Some businesses who’ve tried rehiring furloughed workers to get PPP forgiveness have seen employees say, ‘No thank you, I’d rather stay home,’ ” she said. That worries business borrowers who need to prove they’ve maintained their payroll in order to get the loan forgiven. “Other businesses I’ve talked to have felt a little more comfortable letting workers go because they know that with relatively generous (unemployment insurance) benefits, their workers will be taken care of — that allows them to devote cash to other measures that might keep the business alive and give those employees something to come back to when this is over.”

The painful economic consequences of the virus-related shutdowns have sparked angry protests in several state capitals from crowds demanding that businesses reopen. Some governors have begun easing restrictions despite warnings from health authorities that it may be too soon to do so without sparking new infections. In Georgia, gyms, hair salons and bowling alleys can reopen Friday. Texas has reopened its state parks.

Yet those scattered re-openings won’t lead to much rehiring, especially if Americans are too wary to leave their homes. Most people say they favor stay-at-home orders and believe it won’t be safe to lift social distancing guidelines anytime soon. And there are likely more layoffs to come from many small businesses that have tried but failed to receive loans from a federal aid program.

The total number of people who are receiving unemployment benefits has reached a record 16 million, surpassing a previous high of 12 million set in 2010, just after the 2008-2009 recession ended. This figure reflects people who have managed to navigate the online or telephone application systems in their states, have been approved for benefits and are actually receiving checks.

In some states, many laid-off workers have run into obstacles in trying to file applications for benefits. Among them are millions of freelancers, contractors, gig workers and self-employed people.