Jobless claims show unsteady recovery
Another 1 million Americans filed for unemployment last week as the economy struggles to recover jobs lost as the pandemic rages on, and more than 200,000 claims came in California, where the recession has hit workers particularly hard.
While the national new claims figure — down from 1.1 million a week earlier — may suggest that the devastated economy is wobbling toward improvement, economists warn that it doesn’t mean much.
The number of new claims will probably continue to be “bouncy,” teetering up and down over the next few weeks, Andrew Stettner, senior fellow at the Century Foundation, a progressive think tank, explained. Even with a slight economic recovery, job losses
remain far above prepandemic levels, he said.
The level of claims reported by the Department of Labor on Thursday for the week that ended Saturday, at 1.006 million, was nearly five times what the government agency reported a year ago, including adjustments for seasonal factors. California reported 209,516 new claims in the period, without adjustments.
“We may have regained around one third of the jobs lost initially, but we still have a rather sobering level of unemployment,” said Sara Johnson, executive director of global economics for IHS Markit.
Both Stettner and Johnson said the number of continued claims — those who have been receiving unemployment for several consecutive weeks — are more indicative of how severe the economic damage is. At 14.5 million, those fell only slightly from the previous week, the labor department said Thursday.
“We fell into this deep pit of layoffs, and there has been a rapid ascent out of it, but we’re still towards the bottom,” Stettner said, pointing to the millions of people still on unemployment insurance.
For the jobless, the future of their benefits is still in chaos. An extra $600 a week in pandemic assistance expired almost a month ago, and Congress still has not passed a new stimulus package. Under an executive order, President Trump created a Lost Wages Supplemental Payment Assistance program, which gives an extra $300 a week to anyone receiving at least $100 a week in regular state or federal unemployment benefits.
The extra $300 would be retroactive to Aug. 1. California won approval to participate in the program, but the Employment Development Department has not said how or when this money would get to people, as it is a separate program from regular unemployment benefits.
Once the distribution of the money is figured out, the most people are likely to receive is one check for $900, making up for the threeweek gap since the $600 expired, Stettner said. “It’s not something you can count on,” he added.
Even with the promised stopgap, many of the unemployed aren’t comforted.
Kyle Krueger of Orange County lost his job as a waiter in March. His wife has also been unemployed since last year. Now, the couple are raising their two children, ages 2 and 5, on a mix of unemployment checks and small loans from family members.
Krueger said that while he’s grateful to have the extra support from his family, it isn’t ideal. “It’s a pride thing,” he said. “You want to be able to stand on your own two feet and provide for your family.”
The extra $600 was keeping his family afloat, he said. Without it, he needs help from his family to cover the expenses that come with raising a family — and he’s frustrated that the government didn’t make a decision on a new stimulus package before the Senate adjourned.
“If there’s a national, global crisis when you’re deciding legislation or working on legislation, you don’t leave for three weeks,” he said.
House Speaker Nancy Pelosi said Thursday that Democrats and the White House remain trillions of dollars apart on the size of a new stimulus package.
The lack of new relief could both hurt individuals and hinder the overall economic recovery, economists said.
Putting food on the table or paying rent was easier for people with the $600 supplement, Stettner said, “because that kept people whole, which contributed largely to the whole economy.” While regular unemployment benefits still can keep people out of poverty, going back to that now “puts people in a bad situation,” he added.
The financial strain on families is evident. Even five months after the initial shutdowns, the San FranciscoMarin Food Bank is serving nearly twice the number of households it did before the pandemic, communications manager Keely Hopkins said.
“We were already seeing a tremendous influx in need prior to the expiration of benefits,” she wrote in an email. The food bank serves an average of 56,000 households per week, compared with 32,000 before the pandemic.
The California Association of Food Banks said that as of midAugust, nearly 1 in 4 Californians reported being food insecure, adding up to about 10 million people. They also noted that there is “even deeper hunger among African American and Latinx households.”
The widespread economic hardship is unlikely to let up as the pandemic drags on, IHS Markit’s Johnson said.
“A combination of reduced fiscal policy support and an extended pandemic will hit labor markets hard and prevent a rapid recovery in jobs,” she said.
While Krueger waits for his restaurant job to come back, he’s also considering switching industries entirely. He said that the restaurant industry has been “decimated” by the pandemic, and he isn’t sure when it’ll really be safe to go back to working in that kind of environment. On top of that, new job openings in the industry are few and far between.
But finding a different job is tough as well, as “it’s hard to find the right balance between safety, salary and time,” he explained.
Stettner pointed out that the stress of being unemployed has increased as a result of the pandemic, especially since “emergency work” like driving for Uber is much harder now. Even if people weren’t worried about safety, demand for something like ridehailing apps isn’t there, he said.
For the long term, sustained high levels of unemployment could mean that more people will drop out of the labor force, as finding a job becomes harder and workers become discouraged, Johnson said.
“It will take a few years to get back to a more normal level” of unemployment, she said.
For now, Krueger and his wife are gearing up for starting remote kindergarten with their daughter while they wait. “There’s a lot of anxiety about the future,” he said. “I’m just hoping that the (case) numbers continue to trend down and that some kind of normality returns before the end of the year ... but I doubt that’ll happen.”