US unemployment claims skyrocket

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NEW ORLEANS (AP) – Less than a week ago, David McGraw cooked for hundreds of fine guests daily in one of New Orleans’ famous restaurants.

Today he cooks for himself at home – fired along with hundreds of thousands of people in the United States in a massive economic upheaval triggered by efforts to slow the spread of the coronavirus.

Department of Labor numbers to be released on Thursday are expected to break the old record for most new jobless claims filed in a single week. There are suddenly unemployed Americans than during the Great Recession. And more than after major natural disasters such as hurricanes, fires and floods.

But McGraw and others like him don’t need official numbers to understand the new realities of life at one of the country’s hot spots for the virus that causes COVID-19 disease.

Economic impact of the outbreak:

‚ÄúDismissed the whole city. Everyone, “said McGraw, with an exaggeration that didn’t seem like much.” Anyone who’s worked in a restaurant will be fired. ”

Restaurants, hotels, airlines, automakers, and entertainment venues have been hard hit as cities, states, and entire countries have ordered the closure of nonessential companies and have instructed residents to stay at home.

The aim is to prevent the new corona virus from spreading. Most people experience mild or moderate symptoms such as fever and cough that improve in two to three weeks. However, for some, especially older adults and people with existing health problems, this can lead to more serious illnesses, including pneumonia and death.

Virus precautions have affected the global economy. According to managerial surveys, companies in Europe are firing workers at the fastest pace since the global financial crisis in 2009.

Official labor statistics for Europe have not yet been released, but companies have announced tens of thousands of permanent and temporary job cuts. However, the rise in unemployment may not be as strong as in the US as it is more difficult to fire workers in Europe, where many governments provide financial support to companies to keep workers on partially paid vacation.

Some economists believe the US could see around 3 million new unemployment insurance claims when the figures for the week of March 15-21 were released. That would be around twelve times as many as in the previous week.

“It will be an astronomical increase,” said Constance Hunter, president of the National Association for Business Economists and chief economist at KPMG. “We don’t have a recorded history of anything like that.”

In the Department of Labor records from 1967, the largest seasonally adjusted one-week number of new unemployment insurance claims was 695,000 in October 1982, when the national unemployment rate was around 10%.

Before coronavirus concerns escalated this month, the US unemployment rate was at a 50-year low of 3.5%

That will surely increase as the number of workers made redundant increases.

Dealing with the outbreak:

In Louisiana alone, 71,000 people made new jobless claims last week, compared to the usual 1,400 or 1,500 people a week, State Secretary of Labor Ava Dejoie said.

Louisiana has one of the highest per capita coronavirus cases in the US Democratic government. John Bel Edwards has ordered the closure of unnecessary businesses, restricted take-away and delivery restaurants, prohibited gatherings of over 10 people, and asked residents to stay at home.

New Orleans restaurant owner and caterer Keisha Henry said she lost $ 10,000 in revenue last week after three major events she was scheduled to cancel had been canceled. In the meantime, she still has expenses for opening a bar and lounge six months ago. Henry said she had to fire several employees.

“I wish I could just keep it and pay for it, but as a small company, I don’t have enough capital to pay employees if we don’t get a product out,” she said.

Employees can apply for unemployment benefits in their home country immediately after losing their job. However, it usually takes two to three weeks for them to receive money, as government agencies must first contact their previous employers to review their work experience and then calculate the amount of their weekly benefits based on their previous wages.

Waiting for cash could take longer due to the sudden rise in unemployment claims. People should expect “that the first benefit payments will take much longer than 21 days,” the California Legislative Analyst’s Office warned earlier this week.

Up until last week, many state employment offices were staffed to handle a comparative number of claims. Now they are trying to add workers to deal with the influx.

“Nobody can start up that fast without a bit of hiccups,” said Michele Evermore, senior policy analyst at the National Employment Law Project, a New York-based group that works for low-wage workers and the unemployed.

The legislation signed by President Donald Trump last week could distribute $ 1 billion among states to help manage unemployment claims. But it could take a while for this money to reach the states.

According to legislation pending on Wednesday in Congress, unemployed workers would receive the amount that a state would normally provide for unemployment benefits, plus a federal government-sponsored markup of $ 600 a week. This surge could take up to four months.

While the additional money may help, it cannot remove the discomfort among the newly unemployed.

“I think we have a lot of hope that the system will work as usual in the coming weeks and I just don’t think that’s true,” said Ian Smith, who was fired from his job as a server in a restaurant in the Atlanta area. “The biggest thing that keeps many of us awake at night is what the new normal will look like.”

Many recently unemployed workers have reported frustration with clogged phone lines and congested websites when trying to apply for unemployment benefits.

Corey Rickmers of Rockville, Maryland was on leave from his job as digital engagement manager at a publisher last week. This was his first application for unemployment benefits and his claim was made difficult by the fact that he had previously worked outside the state.

Rickmers said it took several hours on Monday to reach someone who could help him in the State Department of Labor.

“The process is frustrating,” he said. “I can only imagine what millions of people across the country … are currently fighting for.”

Republican Ron DeSantis of Florida, a Republican, said a recent survey of more than 6,600 companies in his state showed that more than half of them had fired employees. The Ministry of Economic Opportunities for the State typically receives between 250 and 1,000 unemployment benefits every day. But DeSantis said the agency received 21,000 claims on Monday.

“We are working to provide them with relief,” said DeSantis. “But man, if we don’t work hard to fix this as soon as possible, it will not only cause economic costs but also health costs.”

Rene Morgan, a web developer who lives in Davie, Florida, is one of those who submit new claims.

He had only been working for a biotechnology startup for a few weeks when he was fired earlier this month after the coronavirus crisis disrupted the company’s supply chain from China. He sells his collection of typewriters on eBay to make money on the rent while waiting to receive unemployment benefits from the state.

“I stop by every day and it keeps saying that my application is being processed,” said Morgan.

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Lieb reported from Jefferson City, Missouri.

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Associate Press Writer Michael Kunzelman in Silver Spring, Maryland; Adriana Gomez Licon in Miami; Carlo Piovano in London; Christopher Rugaber in Washington; Adrian Sainz in Memphis, Tennessee; and Angie Wang in Atlanta contributed to this report.

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