Unemployment claims hit record 3.4M as coronavirus leads to mass layoffs causing labour dept websites to crash
According to an analysis by Economic Policy Institute, this staggering figure would make it the highest level of unemployment ever seen in US history
The novel coronavirus outbreak has not just affected public health around the world but also economic well-being.
The US is no exception either. Last week, unemployment claims in the country reportedly hit an unprecedented 3.4 million after the outbreak resulted in shutdowns on a massive scale. As a result, unemployment websites across the US were crashing because far too many newly unemployed people were putting up applications.
While businesses have suffered owing to the pandemic, workers who have lost jobs overnight are now finding it difficult to get the much-needed benefits as the Labor Department websites have failed to accommodate the big surge in demand.
According to an analysis from the Economic Policy Institute (EPI), Washington DC, claims for unemployment benefits are set to reach 3.4 million for the third week of March. This would make it the highest level of unemployment ever seen in the history of the US, pushing the previous record of around 0.7 million unemployment claims in 1982.
“This will dwarf every other week in history, as can be seen by comparing the projection against the trend in initial claims back to 1967,” the EPI analysis’ authors observed. The figures are set to be unveiled on March 26. This comes after claims went up by 70,000 last week, reported the Daily Mail.
On March 19, the Labor Department reported that the unemployment claims had reached 281,000 in the second week of March. In states like Colorado, the number of jobless people went up from 400 on March 7 to over 6,800 on March 17, forcing its Labor Department website to crash as people queued up in large numbers to apply.
Trump wants to reopen economy fast to reverse fallout
The shocking change of situation caused by the coronavirus outbreak has left the Donald Trump administration deeply worried. The unemployment rate in the US had fallen to a half-century low of 3.5 percent in the recent past and now, Trump is in a hurry to reopen the economy even as the virus threatens to affect a massive part of the population.
State-wide shutdowns have made things worse as non-essential business workers can no longer go to work, resulting in closing down and loss of jobs. One in three Americans has been asked to stay home and this has added to the grim unemployment figures.
Last week, Goldman Sachs made a forecast that unemployment claims would reach 2.25 million in the third week of March based on the rise in claims across 30 states. The EPI’s count, however, comes from 35 states and DC.
In New York state, the worst-hit in the pandemic in the US, 1.7 million people called the state Labor Department last week and it saw a staggering 1,000 percent rise in claims in many areas, the Daily Mail report said, citing an official source.
Meanwhile, the Senate reached a deal on the economic stimulus bill on March 25, but it still remains hanging in the balance as three Republican senators — Lindsey Graham, Tim Scott, and Ben Sasse — launched a last-minute objection.
Under the package, people who lose their jobs because of the pandemic will get four months of unemployment pay besides the government’s aide in forms of individual checks to those earning less than $95,000.
However, economists have warned that the package worth $2 trillion will not be enough to prevent a sharp recession and said the Congress will need to provide yet another relief plan in some months, reported the Washington Times.
Conservative economist Stephen Moore opined the package doesn’t help the economy but only gives people temporary relief.