The data released yesterday by the Department of Labor showed there was a breathtaking increase in the number of people filing for unemployment insurance (UI) during the week ending in March 21, 2020. Initial UI claims skyrocketed to 3.3 million last week—a nearly 1,500% increase over three weeks ago, when 211,000 initial claims were filed.

The comparable state-level data on UI claims is released one week later than the national data, so the most recent information available at the state-level is for two weeks ago—the week ending March 14. While this does not capture the staggering spike in claims that we saw last week, the early effects of coronavirus are already apparent in many states. Figure A displays the percent change in unemployment insurance claims from the prior week.

UI is a critical tool for ensuring that those who are out of work or have seen their hours reduced are still able to make ends meet. The CARES Act, which Congress is currently debating, would adapt UI to meet the needs of the current crisis by expanding who is eligible (gig workers and the self-employed are usually excluded), giving an additional $600 in weekly benefits, and reducing burdensome waiting period, job search, and earnings requirements. Still, UI is just one of many policy levers that should be used to support workers throughout this crisis. Policymakers in every state should work to ensure that they are protecting public health while reducing economic harm to workers.Read more

About 3 million workers filed unemployment claims last week, and 14 million workers are expected to be out of work by June. Large numbers of those who lose their jobs will be low-wage workers, and unfortunately many will be ineligible for unemployment compensation under current overly restrictive eligibility rules.

Federal and state legislators, however, have the power to act and come to the aid of these vulnerable workers. The Coronavirus Aid, Relief and Economic Security (CARES) Act—which has passed the Senate by unanimous consent and is moving to the House today—has notable limitations, but would greatly expand eligibility for unemployment insurance.

The expansion is necessary and important because unemployment benefits are generally limited to those who had high enough earnings when they were working. But low-wage workers experience higher rates of joblessness, lowering their baseline earnings and making them less eligible to collect UI benefits.

Figure A shows that unemployment rates are substantially higher for low-wage workers, defined as those workers who earn less than their state’s 30th percentile wage.

During the Great Recession, nearly one out of five workers who had earned low wages also experienced some unemployment. In contrast, unemployment rates were only about half as high for the rest of the workforce who earned more than their state’s 30th percentile wage. Given the toll on the service industry during the current pandemic, we should expect unemployment to skyrocket for low-wage workers.Read more

Last week, we published a map showing the job losses in each state likely to occur over the coming months as businesses shutter in response to the social distancing measures necessary to stop the spread of COVID-19. Sadly, our predictions were likely too optimistic. Expectations of how many jobs will ultimately be lost are rapidly evolving, with new forecasts from different macroeconomic analysts being released on an almost daily basis. As new data and projections become available, EPI is updating our estimates of the number of jobs nationally, and by state, that the economy is likely to lose in the coming months.

Our best guess at this point is that the national economy could lose 14 million jobs by summer 2020. These estimates assume $1 trillion in fiscal stimulus—in other words, even with $1 trillion in stimulus, the job losses will be enormous. EPI estimates we will need at least $2.1 trillion in federal stimulus through 2020 to restore the country to reasonable economic health. Congress is debating an economic stimulus package around $2 trillion, and if it is targeted enough, it could help mitigate some of these losses. Yet even with these measures, many people will still need to remain out of work, potentially for months, in order to stop the virus’s spread. In addition to federal action, lawmakers at the state and local levels must do everything they can to ensure that these workers and their families do not suffer economically during this time.

As with our previous post, the map in Figure A shows how the projected 14 million jobs lost nationally are likely to be distributed across the states. The national job losses are distributed in proportion to the average of each state’s share of total national private-sector employment and each state’s share of national retail, leisure, and hospitality employment. We give added weight to these sectors as they are likely to be disproportionately affected by the social distancing measures that are needed to slow this pandemic. States like Nevada, Montana, and Hawaii are projected to lose the highest percentage of their employment because a large amount of their workforce is employed in the leisure, hospitality, and retail sectors.Read more

On Tuesday, New York Governor Andrew Cuomo spent much of his coronavirus press conference imploring President Trump to use the Defense Production Act (DPA) now to force factories to manufacture essential medical equipment such as masks, gloves, gowns, and ventilators.

Trump has continually refused to do so, saying that the acquisition of medical supplies is a job for governors: “You know, we’re not a shipping clerk.” Yet, on a conference call last week, Republican governor Charlie Baker (Mass.) told Trump that his state had been denied three major orders for medical equipment because the federal government had outbid him.

Health care workers are at the front lines of the COVID-19 crisis. In Italy, 9% of “total COVID-19 cases are health care workers, contributing to the breakdown of the hospital system in the north of the country.” U.S. health care workers are also especially hard hit.

While both Democratic and Republican governors are pleading for help, staff in at least one nursing home have already resorted to using plastic garbage bags to make gowns, as have nurses and doctors in Spain and England.

Clearly, the DPA will make a difference.Read more