Northwest Arkansas Democrat-Gazette
Jobless-benefit claims slide by 7,000 in week
Applications for U.S. state unemployment insurance fell slightly last week, as the labor market meanders toward a full recovery.
The Labor Department said Thursday that jobless claims fell just 7,000 from the previous week to 411,000. Weekly claims have fallen steadily this year from about 900,000 in January.
The economy expanded at a healthy pace in the first three months of the year, the government also reported Thursday, and economists are optimistic that growth will accelerate in the AprilJune quarter, when it could top 10% at an annual rate. As the pandemic fades, states and cities are lifting more business restrictions — California just fully reopened June 15 — and the economy is picking up as consumers are traveling, eating out more, and visiting movie theaters and amusement parks.
Unemployment claims jumped 14,500 last week in Pennsylvania, the big
gest gain by far of any state. Pennsylvania revamped its benefits filing system earlier this month, likely leading to some backlogs and distorting the overall data. Thirty-five states reported that claims fell last week.
All told, 14.8 million Americans received jobless benefits during the week that ended June 5, the latest data available. That was little changed from the previous week.
With many employers desperate to hire, some states are starting to cut off pandemic-related unemployment aid programs in response to business complaints that the assistance is making it harder for them to find workers.
By the end of the month, 26 states will end an extra $300 weekly federal unemployment payment and 22 of those states also will cut off all jobless assistance to selfemployed, gig workers, and those out of work more than six months.
Arkansas will stop paying the federal $300 supplement after Saturday. The supplement ends nationwide Sept. 6.
Economists at Bank of America have estimated that those who earned less than $32,000 a year at their previous jobs can receive more in jobless aid with the extra $300. At the same time, the federal government last year set up two unemployment benefit programs that covered millions of self-employed and contract workers for the first time.
Four states — Alaska, Iowa, Mississippi, and Missouri — stopped providing the $300 payment last week. All but Alaska also cut off the two programs that covered the self- employed and the long-term jobless.
In Iowa, Mississippi, and Missouri, about 163,000 people are no longer receiving jobless aid because of the cutoff.
The decision by 26 states — nearly all run by Republican governors — to drop the $300 will sharply reduce unemployment aid for roughly 4.7 million people, the National Employment Law Project, a worker advocacy group, estimates. State jobless benefits provide, on average, about $320 a week and typically replace about 40% of an unemployed worker’s previous wages.
About 2.3 million people will lose all their unemployment aid in the 22 states that have decided to end assistance for the self-employed and long- term jobless, according to the group.
A coalition of progressive groups released a report Thursday arguing that the early cutoff of benefits and the difficulties administering unemployment aid earlier in the pandemic show that the current unemployment insurance system, administered jointly by the federal and state governments, is inadequate for deep downturns such as the pandemic recession.
When the pandemic shutdowns kicked in suddenly in March 2020, most state unemployment systems were quickly overwhelmed by requests for jobless aid by millions of newly-laid off workers. Some did not receive benefits for months.
And when the federal government created the new programs covering those ineligible for state aid, many state agencies struggled to reprogram outdated software — some dating from the 1960s — to handle the additional applications.
In their report, the Economic Policy Institute, the National Employment Law Project, the Center for Popular Democracy, and the Washington Center for Equitable Growth recommended a range of changes, such as permanently expanding eligibility to include gig workers and contractors; automatically extending benefits during recessions beyond the 26 weeks provided by most states; and increasing minimum benefit levels.
Declines for initial claims were widespread, with states including California, Florida and Ohio posting some of the biggest drops. Pennsylvania posted the biggest gain in applications last week.
Federal Reserve officials are focused on achieving maximum employment, which they define as a “broad and inclusive goal.” In a congressional hearing Tuesday, Chairman Jerome Powell said the labor market has a long way to go and needs continued support.
“The very quick job gains of the early recovery essentially involved going back to your old job,” Powell said. “Now it’s actually finding new jobs and that’s a matching function that is more labor intensive and time consuming.”